Contract
[CERTAIN INFORMATION, IDENTIFIED BY, AND REPLACED WITH, A MARK OF “[***]” HAS BEEN EXCLUDED FROM THIS DOCUMENT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. CERTAIN SCHEDULES AND EXHIBITS HAVE BEEN OMITTED PURSUANT TO ITEM 601(A)(5) OF REGULATION S-K.]
Execution Version
by and among TERRASCEND USA, INC.,
as Borrower Representative,
the Subsidiaries and Affiliates of the Borrower Representative from time to time party hereto, as Xxxxxxxxx,
TERRASCEND CORP., as Parent, TERRASCEND USA, INC., as US Parent,
as Guarantors,
FG AGENCY LENDING LLC, as the Agent and
each of the Lenders from time to time party hereto Dated as of August 1, 2024
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS 1
SECTION 1.1 Certain Defined Terms 1
SECTION 1.2 Terms Generally 33
SECTION 1.3 Computation of Time Periods 34
SECTION 1.4 Accounting Terms 34
ARTICLE II. AMOUNTS AND TERMS OF THE TERM LOANS 34
SECTION 2.1 The Term Loans 34
SECTION 2.2 Origination Discount 37
SECTION 2.3 Interest 37
ARTICLE III. PAYMENTS, PREPAYMENTS, TAXES 37
SECTION 3.1 Payments and Computations 37
SECTION 3.2 Prepayments 38
SECTION 3.3 Taxes 39
SECTION 3.4 Joint and Several Obligations 42
ARTICLE IV. SECURITY 44
SECTION 4.1 Grant of Security Interest 44
SECTION 4.2 Delivery of Additional Documentation Required 45
SECTION 4.3 Release of Security Interest 45
ARTICLE V. CONDITIONS OF LENDING 45
SECTION 5.1 Conditions Precedent to the Initial Term Loan 45
SECTION 5.2 Conditions Precedent to the Delayed Term Loan 47
ARTICLE VI. REPRESENTATIONS AND WARRANTIES 50
SECTION 6.1 Existence 50
SECTION 6.2 Power and Authorization 50
SECTION 6.3 Binding Obligations 50
SECTION 6.4 Financial Statements; No Material Adverse Effect 50
SECTION 6.5 Intellectual Property 51
SECTION 6.6 Properties 52
SECTION 6.7 Equity Interests and Subsidiaries 52
SECTION 6.8 Investment Company Act 53
SECTION 6.9 No Material Misstatements 53
SECTION 6.10 Labor Matters 53
SECTION 6.11 ERISA 54
SECTION 6.12 Environmental Matters 55
SECTION 6.13 Insurance 55
SECTION 6.14 Security Documents 55
SECTION 6.15 PATRIOT Act, etc 55
SECTION 6.16 Anti-Money Laundering Laws 56
SECTION 6.17 Anti-Corruption Laws and Sanctions. 57
SECTION 6.18 Reserved 57
SECTION 6.19 Taxes; Governmental Charges 57
SECTION 6.20 Compliance with Law 57
SECTION 6.21 Absence of Financing Statements 57
SECTION 6.22 Litigation 57
SECTION 6.23 Solvency 57
SECTION 6.24 Material Contracts 58
SECTION 6.25 No Default or Event of Default 58
SECTION 6.26 No Conflicts 58
SECTION 6.27 Reserved 58
SECTION 6.28 Bank Accounts 58
ARTICLE VII. AFFIRMATIVE COVENANTS 58
SECTION 7.1 Compliance 59
SECTION 7.2 Reporting and Notice Requirements 59
SECTION 7.3 Use of Proceeds 63
SECTION 7.4 Taxes and Liens 63
SECTION 7.5 Maintenance of Property and Licenses 63
SECTION 7.6 Right of Inspection 64
SECTION 7.7 Insurance 64
SECTION 7.8 Maintenance of Office 65
SECTION 7.9 Existence 65
SECTION 7.10 Deposit Account Control Agreements 65
SECTION 7.11 Landlord Waivers; Collateral Access Agreements 65
SECTION 7.12 Additional Borrowers, Guarantors and Collateral Security 65
SECTION 7.13 Anti-Corruption Laws and Anti-Money Laundering Laws 66
SECTION 7.14 Lender Meetings 66
SECTION 7.15 Lien Releases 67
SECTION 7.16 Sales-Tracking Software 67
SECTION 7.17 Further Assurances 67
SECTION 7.18 Post-Closing Obligations 67
SECTION 7.19 Securities Laws Matters 67
ARTICLE VIII. NEGATIVE COVENANTS 67
SECTION 8.1 Restrictive Agreements, Etc 67
SECTION 8.2 Restrictions on Debt 68
SECTION 8.3 Restrictions on Liens. 70
SECTION 8.4 Mergers and Acquisitions 73
SECTION 8.5 Related Party Transactions 73
SECTION 8.6 Restricted Payments 73
SECTION 8.7 Restricted Investments 74
SECTION 8.8 Dispositions 76
SECTION 8.9 [Reserved.] 76
SECTION 8.10 Changes in Organizational Documents 76
SECTION 8.11 Financing Transactions 76
SECTION 8.12 Sale and Leaseback Transactions 76
SECTION 8.13 Change in Nature of Business 76
SECTION 8.14 Modifications of Debt and Certain Other Agreements; Etc 76
SECTION 8.15 Limitations on Negative Pledges 77
SECTION 8.16 Restrictions on Guarantors and Non-Loan Parties 77
SECTION 8.17 Restrictions on Pelorus Borrowers. 78
SECTION 8.18 Minimum Liquidity 78
SECTION 8.19 Right of [***] 78
ARTICLE IX. EVENTS OF DEFAULT 79
SECTION 9.1 Events of Default 79
SECTION 9.2 Remedies 82
ARTICLE X. THE BORROWER REPRESENTATIVE. 82
SECTION 10.1 Appointment; Nature of Relationship 82
SECTION 10.2 Powers 83
SECTION 10.3 Employment of Agents 83
SECTION 10.4 Notices 83
SECTION 10.5 Successor Borrower Representative 83
SECTION 10.6 Execution of Loan Documents. 83
ARTICLE XI. MISCELLANEOUS 83
SECTION 11.1 Survival of Representations and Warranties 83
SECTION 11.2 Amendments, Etc 84
SECTION 11.3 Notices, Etc 85
SECTION 11.4 No Waiver; Remedies 86
SECTION 11.5 Costs and Expenses 86
SECTION 11.6 Indemnification 86
SECTION 11.7 Right of Set-off 88
SECTION 11.8 Binding Effect 88
SECTION 11.9 Assignments and Participations 88
SECTION 11.10 Limitation on Agreements 90
SECTION 11.11 SUBMISSION TO JURISDICTION; WAIVERS 91
SECTION 11.12 Severability 92
SECTION 11.13 Governing Law 92
SECTION 11.14 WAIVER OF DEFENSE OF ILLEGALITY 92
SECTION 11.15 Execution in Counterparts; Electronic Signatures 93
SECTION 11.16 Confidentiality 93
ARTICLE XII. RIGHTS AND DUTIES OF AGENT 94
SECTION 12.1 Appointment and Authority 94
SECTION 12.2 Agent 94
SECTION 12.3 Rights as a Lender 94
SECTION 12.4 Loan Information 95
SECTION 12.5 Enforcement of Loan 95
SECTION 12.6 Nature of Duties of the Agent 96
SECTION 12.7 Standard of Care 97
SECTION 12.8 Indemnification of the Agent by Xxxxxxx 97
SECTION 12.9 Erroneous Payments 98
SECTION 12.10 Merger or Consolidation 101
SECTION 12.11 Delegation of Duties 101
SECTION 12.12 Resignation of Agent 101
SECTION 12.13 Non-Reliance on Agent and Other Lenders 102
SECTION 12.14 Agent May File Proofs of Claim 103
SECTION 12.15 Appointment of Collateral Agent 103
SECTION 12.16 Force Majeure 103
ARTICLE XIII. GUARANTY 104
SECTION 13.1 Guaranty of Obligations 104
SECTION 13.2 Continuing Obligation 104
SECTION 13.3 Waivers with Respect to Obligations 105
SECTION 13.4 Agent’s Power to Waive, etc 106
SECTION 13.5 Information Regarding the Borrower, etc. 107
SECTION 13.6 Certain Guarantor Representations. 107
SECTION 13.7 Subrogation. 108
SECTION 13.8 Subordination. 108
SECTION 13.9 Contribution Among Guarantors. 108
SECTION 13.10 Further Assurances. 108
SCHEDULES AND EXHIBITS
Schedule 1.1(a) Term Loan Commitment Amount Schedule 1.1(b) Borrowers
Schedule 1.1(c) Excluded Subsidiaries Schedule 1.1(d) Material Licenses
Schedule 1.1(e) Description of Specified Acquisition Schedule 5.2(f) Financing Debt
Schedule 6.5(c) Intellectual Property Claims Schedule 6.6(c) Property
Schedule 6.7 Equity Interests and Subsidiaries Schedule 6.13 Insurance
Schedule 6.22 Litigation
Schedule 6.24 Material Contracts
Schedule 6.28 Bank Accounts
Schedule 7.18 Post-Closing Obligations Schedule 8.2 Existing Debt
Schedule 8.3 Existing Liens
Schedule 8.5 Existing Related Party Transactions Schedule 8.7 Existing Investments
Exhibit A Form of Assignment and Acceptance Agreement Exhibit B Form of Joinder Agreement
Exhibit C Form of Note
Exhibit D Form of Funding Notice
Exhibit E Compliance Certificate
This Loan Agreement, dated as of August 1, 2024 (this “Agreement”), is made by and among (i) TerrAscend Corp., an Ontario corporation (“Parent”) and TerrAscend USA, Inc., a Delaware corporation (“US Parent”), as Guarantors, (ii) the Subsidiaries of US Parent party to this Agreement as of the Closing Date and listed on Schedule 1.1(b), and the other Subsidiaries of US Parent party hereto from time to time (each, individually, a “Borrower” and collectively, the “Borrowers”), (iii) each of the lenders party hereto and referenced as an “INITIAL TERM LOAN LENDER” on the signature pages hereto together with their permitted successors and assignees (the “Initial Term Loan Lenders”), (iv) each of the lenders party hereto and referenced as a “DELAYED TERM LOAN LENDER” on the signature pages hereto together with their permitted successors and assignees (the “Delayed Term Loan Lenders” and, together with the Initial Term Loan Lenders, the “Lenders”), and (iv) FG Agency Lending LLC, as administrative agent for the Lenders (in such capacity, the “Agent”).
RECITALS:
WHEREAS, the Borrowers have requested, and the Lenders have agreed to make available to Borrowers, a term loan upon and subject to the terms and conditions set forth in this Agreement;
WHEREAS, the Borrowers desire to use the proceeds of the Term Loan to, among other things, refinance existing indebtedness of certain of the Borrowers in respect of the Refinanced Debt, for the payment of Agent’s fees and expenses and other transaction expenses incurred relating to the transactions contemplated hereunder, and for working capital and general corporate purposes;
WHEREAS, the Borrowers desire to secure all of their Obligations under the Loan Documents by granting to Agent, for the benefit of the Lenders, a security interest in and lien upon their respective Collateral; and
WHEREAS, subject to the terms hereof and the other applicable Loan Documents, each Guarantor is willing to grant to Agent, for the benefit of the Lenders, a security interest in and lien upon the Pledged Equity.
NOW THEREFORE, in consideration of the premises and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“Acquisition” means the acquisition (whether by means of a merger, consolidation or otherwise) of more than fifty percent (50%) of the Equity Interests of any Person or all or substantially all of the assets of (or any division or business line of) any Person.
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“Adjusted EBITDA” means, for any period, with respect to Parent and its consolidated Subsidiaries:
period, plus,
for such period, the sum of:
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(xvi), (xvii), (xviii), (xix) (limited solely to the extent of any fees paid in cash to terminate any
applicable lease), (xx) and (xxi) above may not exceed, in the aggregate, 15% of Adjusted EBITDA (without giving effect to any adjustments pursuant to such clauses) for any given period, provided, further, that any adjustments pursuant to this clause (b) shall only be included in the calculation of Adjusted EBITDA if such adjustments are also included in “Adjusted EBITDA” as
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reported in Parent’s public filings.
Minus
in each case, determined on a consolidated basis and in accordance with GAAP.
“Affiliate” means any Person which, directly or indirectly, controls or is controlled by or is under common control with another Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities or by contract or otherwise.
“Agent” has the meaning specified in the preamble. “Agent Fee” has the meaning specified in the Fee Letter.
“Allocable Amount” has the meaning specified in Section 3.4(d).
“Anti-Corruption Laws” means Requirements of Law relating to anti-bribery or anti-corruption (governmental or commercial) which apply to Borrower or any of its Subsidiaries (if applicable), including Requirements of Law that prohibit the corrupt payment, offer, promise, or authorization of the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any foreign government official, foreign government employee or commercial entity to obtain a business advantage; including the Foreign Corrupt Practices Act and the U.K. Bribery Act of 2010.
“Anti-Money Laundering Laws” means any of the Requirements of Law relating to terrorism or money laundering, including Executive Order No. 13224, the PATRIOT Act, the Bank Secrecy Act, the Money Laundering Control Act of 1986 (i.e., 18 USC. §§ 1956 and 1957) and all Requirements of Law comprising or implementing these Requirements of Law.
“Applicable Percentage” shall mean, as to each Lender, the percentage of the total aggregate principal amount of Term Loans held by such Lender at such time. The Applicable Percentage of each Lender as of the Closing Date is set forth opposite the name of such Lender on Schedule 1.1(a) or in the assignment agreement pursuant to which such Lender becomes a party hereto, as applicable, in each case, subject to subsequent assignments and adjustments in accordance with the terms hereof.
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“Applicable Securities Legislation” shall mean all applicable securities laws of each of the Reporting Jurisdictions and the respective rules and regulations under such laws together with applicable published fee schedules, prescribed forms, policy statements, national or multilateral instruments, orders, blanket rulings and other applicable regulatory instruments of the securities regulatory authorities in any of the Reporting Jurisdictions.
“Assignment and Acceptance Agreement” means an assignment and acceptance entered into by an assigning Lender and an assignee, and accepted by Agent, in accordance with Section 11.9 hereof and substantially in the form of Exhibit A hereto or such other form acceptable to Agent.
“Authorized Officer” means, with respect to any Loan Party, any of the chief executive officer, chief financial officer, chief operating officer or the general counsel.
“Avoidance Provisions” has the meaning specified in Section 3.4(c).
“Bank Accounts” means each bank account, securities account or other depositary account of a Borrower Party.
“Bankruptcy Code” means the Bankruptcy Code of the United States, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-up and Restructuring Act (Canada), and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, arrangement, receivership, insolvency, administration, reorganization, or similar debtor relief laws of the United States, Canada, or other applicable jurisdictions from time to time in effect and permitting a debtor to obtain a stay or a compromise of the claims of its creditors or affecting the rights of creditors generally, including for greater certainty any provisions of corporate statutes of like effect, where such statutes are used by a Person to propose an arrangement.
“Blocked Person” shall have the meaning assigned to such term in Section 6.16(b). “Borrower” has the meaning specified in the preamble.
“Borrower Adjusted EBITDA” means, for any period, the amount of Adjusted EBITDA calculated in accordance with the definition thereof with the following modifications: (i) any reference to “Parent and its consolidated Subsidiaries,” “Loan Parties or their Subsidiaries,” “Loan Parties or any of their Subsidiaries” or “Loan Parties and their Subsidiaries” shall be replaced with reference to “Borrower Parties.”
“Borrower Holding Company” means each of WDB Holding CA, Inc., a Delaware corporation, WDB Holding PA, Inc., a Delaware corporation and WDB Holding MI, Inc., a Delaware corporation.
“Borrower Parties” means, collectively, each Borrower and each of its Restricted Subsidiaries. As of the Closing Date the Borrower Parties are set forth on Schedule 1.1(b) attached hereto.
“Borrower Total Debt to Adjusted EBITDA Ratio” means, for any period, the ratio of (a) the aggregate principal amount of Debt of the Borrower Parties consisting solely of
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Financing Debt to (b) Borrower Adjusted EBITDA for such period, in each case measured on a trailing twelve month basis for the period then ended.
“Business Day” means a day of the year on which banks are not required or authorized to close in New York, New York.
“Canadian Securities Authorities” means, collectively, the securities commissions or other securities regulatory authorities in the provinces of Alberta, British Columbia and Ontario.
“Cannabis License” means any permit or license to cultivate, process, distribute, manufacture, dispense, sell, transport or engage in any other activity relating to medical and/or adult-use marijuana, issued by any Governmental Authority pursuant to applicable Federal Cannabis Laws or applicable state Requirements of Law relating to the farming, growth, production, processing, packaging, sale, distribution, or any other activity relating to medical and/or adult-use marijuana.
“Capital Lease” means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such person prepared in accordance with GAAP.
“Capital Lease Obligations” mean, with respect to any Person, the obligations of such Person to pay rent or other amounts under any Capital Lease, any lease entered into as part of any Sale and Leaseback or any Synthetic Lease, or a combination thereof, which obligations are (or would be, if such Synthetic Lease or other lease were accounted for as a Capital Lease) required to be classified and accounted for as Capital Leases on a balance sheet of such person under GAAP, and the amount of such obligations shall be the capitalized amount thereof (or the amount that would be capitalized, if such Synthetic Lease or other lease were accounted for as a Capital Lease) determined in accordance with GAAP (subject to Section 1.4).
“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case, maturing within twelve (12) months from the date of acquisition thereof; (b) commercial paper, maturing not more than 365 days after the date of issue rated P-2 by Xxxxx’x or A-2 by Standard & Poor’s; (c) certificates of deposit maturing not more than 365 days after the date of issue, issued by commercial banking institutions and money market or demand deposit accounts maintained at commercial banking institutions, each of which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000; (d) repurchase agreements having maturities of not more than ninety (90) days from the date of acquisition which are entered into with major money center banks included in the commercial banking institutions described in clause
(c) above and which are secured by readily marketable direct obligations of the United States Government or any agency thereof; (e) money market accounts maintained with mutual funds having assets in excess of $2,500,000,000, which assets are primarily comprised of Cash Equivalents described in another clause of this definition; (f) marketable tax exempt securities rated A or higher by Moody’s or A+ or higher by Standard & Poor’s, in each case, maturing within 270 days from the date of acquisition thereof; and (g) solely in the case of and with respect to a Foreign Subsidiary, Investments of a kind or type similar to the Cash Equivalents described in
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clauses (a) through (f) above customarily utilized in the jurisdiction of organization of such Foreign Subsidiary for cash management purposes.
“Change in Law” means any adverse change after the Closing Date in applicable law, including Federal Cannabis Law or US State Cannabis Law, or the application or interpretation thereof by any Governmental Authority, (a) that would make it unlawful for the Agent or any Lender to (i) continue to be a party to any Loan Document, (ii) perform any of its obligations hereunder or under any other Loan Document or (iii) to fund or maintain the Term Loans, (b) pursuant to which any Governmental Authority has enjoined the Agent or any Lender from (i) continuing to be a party to any Loan Document, (ii) performing any of its obligations hereunder or under any other Loan Document or (iii) funding or maintaining the Term Loans, (c) pursuant to which any Governmental Authority requires (i) confidential information from or disclosure of confidential information about the Agent, any Lender, any Affiliate thereof or any investor therein or (ii) the Agent or any Lender to obtain any permit, in each case, to (A) continue to be a party to any Loan Document, (B) perform any of its obligations hereunder or under any other Loan Document, (C) fund or maintain the Term Loans, and in the case of this clause (c) the Agent or such Lender, as applicable, has elected to exercise similar remedies afforded to it in other loans in their respective portfolios, or (d) that would result in the business activities conducted by any Loan Party being Restricted Cannabis Activities.
“Change of Control” means any of the following (or any combination of the following) whether arising from any single transaction event or series of related transactions or events that, individually or in the aggregate, result in:
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“Chicago Atlantic Facility” means the Debt and other obligations evidenced by the Credit Agreement dated as of November 2, 2021, by and among Gage Growth Corp. and its subsidiaries, as borrowers, and Chicago Atlantic Admin, LLC, as administrative agent and collateral agent, as amended prior to the Closing Date.
“Closing Date” means August 1, 2024.
“Code” means the Internal Revenue Code of 1986.
“Collateral” shall have the meaning assigned to such term in the Security
Agreement.
“Commitment” means, collectively, (a) with respect to any Initial Term Loan
Lender, the Initial Term Loan Commitment, and (b) with respect to any Delayed Term Loan Lender, the Delayed Term Loan Commitment.
“Competitor” means a Person that is (a) an operating company identified in writing to the Agent prior to, on or after the Closing Date that is a bona fide competitor engaged primarily in substantially the same or similar business as the Loan Parties, (b) any clearly identifiable Affiliate of any Person referred to in clause (a) of this definition based solely on the name of such Affiliate or any entity actually known by the applicable assignor to be an Affiliate of such Person, or (c) any other Affiliate of any Person referred to in clause (a) of this definition that is identified in writing to the Agent from time to time; provided, however, that Competitor shall exclude (i) any Person that the Borrowers have designated as no longer being a Competitor by written notice delivered to the Agent from time to time, and (ii) any bona fide debt fund or an investment vehicle that is engaged in the making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course.
“Contributing Parties” has the meaning specified in Section 3.4(d).
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“Control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Controlled Account” means each Bank Account that is subject to a DACA, in form and substance reasonably satisfactory to the Agent, but excluding, in any event, any Excluded Account.
“DACA” and “DACAs” has the meaning specified in Section 7.10.
“Debt” means (without duplication), for any Person, (a) indebtedness of such Person for borrowed money or arising out of any extension of credit to or for the account of such Person (including, without limitation, extensions of credit in the form of reimbursement or payment obligations of such Person relating to letters of credit issued for the account of such Person) or for the deferred purchase price of property or services, but excluding liabilities incurred in the ordinary course of business including as incurred through the obtaining of credit and for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services (including, without limitation, trade payables, accrued expenses payable or other accounts payable incurred in the ordinary course of business that are less than ninety (90) days past due or which are being contested in good faith); (b) indebtedness of the kind described in clause (a) of this definition which is secured by (or for which the holder of such debt has any existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including, without limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness or obligations; (c) all Capital Lease Obligations; (d) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any stock or stock equivalents of such Person, valued, in the case of redeemable preferred stock, at the greater of its voluntary liquidation preference and its involuntary liquidation preference plus accrued and unpaid dividends; (e) all contingent liabilities and obligations under direct or indirect guarantees in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (a) through (d) above; (f) net obligations of a Person under any swap or hedging arrangement; and (g) any monetary obligation of a Person under or in connection with a sale- leaseback or similar arrangement. Notwithstanding the foregoing, Debt of any Person shall exclude (i) accruals for payroll and other similar liabilities accrued in the ordinary course of business, (ii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller, (iii) any obligations in respect of worker’s compensation claims, early retirement or termination obligations or contributions or similar claims, obligations or contributions or social security or wage Taxes in the ordinary course of business, (iv) non-compete or consulting obligations to which the seller in an acquisition may become entitled, (v) any earn-out, purchase price adjustment, indemnity or similar obligation until such obligation is required to appear in the liabilities section of the balance sheet of such Person in accordance with GAAP, (vi) customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business, and (vii) operating leases. The amount of Debt described in clause (f) shall be deemed to be the net swap termination value thereof as of the applicable determination date. The amount of Debt described in clause (b) that is limited in recourse to specific property shall be valued at the lesser of the aggregate unpaid
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amount of such Debt and the fair market value of such property.
“Debtor Laws” means all applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization or similar laws including the Bankruptcy Code, or general equitable principles from time to time in effect affecting the rights of creditors generally.
“Default” means any event the occurrence of which does, or with the lapse of time or giving of notice or both would, constitute an Event of Default.
“Default Rate” means a rate of interest per annum equal to seventeen percent
(17%).
“Delayed Term Loan” means the secured, first lien, term loan that may be issued
by the Lenders on the Delayed Term Loan Effective Date in accordance with Section 2.1(b), with a face amount not exceeding the Delayed Term Loan Face Amount.
“Delayed Term Loan Commitment” means, as to each Delayed Term Loan Lender, such Delayed Term Loan Lender’s obligation to make the Delayed Term Loan on the Delayed Term Loan Effective Date, in an amount up to, but not exceeding the amount set forth for such Delayed Term Loan Lender on Schedule 1.1(a) as such Delayed Term Loan Lender’s “Delayed Term Loan Commitment Amount”.
“Delayed Term Loan Effective Date” means the date of the making of the Delayed
Term Loan.
“Delayed Term Loan Face Amount” means $26,000,000.
“Delayed Term Loan Refinanced Debt” means the Debt and all other obligations
outstanding as of the Delayed Term Loan Effective Date under the Chicago Atlantic Facility.
“Delayed Term Loan Request Period” means the period commencing on the Closing Date and ending on September 30, 2024 or such later date as permitted by the Agent in its sole discretion.
“Disposition” means any transaction, or series of related transactions, pursuant to which any Person sells, assigns, transfers, leases, licenses (as licensor) or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person. For purposes of clarification, “Disposition” shall include (a) the sale or other disposition for value of any contracts, and (b) the early termination or modification of any contract resulting in the receipt by any Borrower Party of a cash payment or other consideration in exchange for such event (other than payments in the ordinary course for accrued and unpaid amounts due through the date of termination or modification).
“Dollars” means the lawful currency of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District
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of Columbia.
“Eligible Assignee” means any actual or prospective assignee of a Lender to whom a Lender may assign all or any of its rights hereunder and under the other Loan Documents, but excluding, for the avoidance of doubt, any Competitor.
“Environmental Laws” means any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, or other legally binding requirements of any Governmental Authority, regulating, relating to or imposing liability or standards of conduct concerning pollution, the preservation or protection of the environment, natural resources or human health (including employee health and safety) but only with respect to exposure to Materials of Environmental Concern, or the generation, manufacture, use, labeling, treatment, storage, handling, transportation or release of, or exposure to, Materials of Environmental Concern, as has been, is now, or may at any time hereafter be, in effect.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties, attorney or consultant fees or indemnities) resulting from or based upon (a) non-compliance with any Environmental Law or any Environmental Permit, (b) exposure to any Materials of Environmental Concern in violation of Environmental Laws, (c) release or threatened release of any Materials of Environmental Concern in violation of Environmental Laws, (d) any investigation, remediation, removal, clean-up or monitoring required under Environmental Laws or required by a Governmental Authority (including without limitation Governmental Authority oversight costs that the party conducting the investigation, remediation, removal, clean-up or monitoring is required to reimburse) or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Environmental Permits” means any and all permits, licenses, approvals, registrations, notifications, exemptions and other authorizations required under any Environmental Law.
“Equity Interests” means, as to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliates” means, collectively, Borrower and all Subsidiaries (if applicable), and each other Person, trade or business (whether or not incorporated) under common control or treated as a single employer with Borrower or any Subsidiary within the meaning of Section 414(b), 414(c) or 414(m) of the Code.
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“ERISA Event” means (a) any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder with respect to a Multiemployer Plan or a Title IV Plan; (b) a withdrawal by Borrower, any Subsidiary or any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA); (c) a complete or partial withdrawal (as defined in Sections 4203 and 4205 of ERISA) by Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan which results in the imposition of withdrawal liability; (d) the receipt by Borrower, any Subsidiary or any ERISA Affiliate of notice of intent to terminate with the PBGC or the treatment of a plan amendment as a termination under Section 4041 or 4041A of ERISA of a Title IV Plan;
(e) the commencement of proceedings by the PBGC to terminate a Multiemployer Plan or a Title IV Plan; (f) a failure by Borrower, any Subsidiary or any ERISA Affiliate to make required contributions to any Multiemployer Plan or any Title IV Plan unless such failure is not reasonably expected to result in any material liability to Borrower or any Subsidiary; (g) an event or condition which would reasonably be expected to constitute grounds under Section 4041A or 4042 of ERISA for the termination of, or the appointment of a trustee to administer any Multiemployer Plan or any Title IV Plan; (h) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower, any Subsidiary or any ERISA Affiliate; (i) a non-exempt prohibited transaction occurs with respect to any Multiemployer Plan or any Title IV Plan which would reasonably be expected to result in a material liability to Borrower or any Subsidiary; or (j) a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a)(2) of the Code by any fiduciary or disqualified Person with respect to any employee benefit plan for which Borrower, any Subsidiary or any ERISA Affiliate may be directly or indirectly liable which would reasonably be expected to result in a material liability to Borrower or any Subsidiary.
“Erroneous Payment” has the meaning assigned to it in Section 12.9(a). “Erroneous Payment Deficiency Assignment” has the meaning assigned to it in
Section 12.9(d)(i).
“Erroneous Payment Return Deficiency” has the meaning assigned to it in Section 12.9(d)(i).
“Erroneous Payment Subrogation Rights” has the meaning assigned to it in Section 12.9(e).
“Events of Default” and “Event of Default” have the meaning specified in
Section 9.1.
“Excluded Account” means, collectively, means (a) any Bank Account specifically
and exclusively used for payroll, payroll Taxes, withholding Taxes, payment of other Taxes (including sales tax accounts), workers compensation and employee wage and benefit payments to or for the benefit of any Borrower Party’s employees, (b) any Bank Account specifically and exclusively used as an escrow or fiduciary account for a Person that is not an Affiliate of any Borrower Party and (c) any Permitted Third-Party Mortgage Debt Deposit Accounts.
“Excluded Subsidiary” means, collectively, any Subsidiary of a Borrower Party (a) that is prohibited or restricted by applicable Requirements of Law or any restriction in any contract existing at the time such Subsidiary is acquired (so long as such restriction is not agreed to in
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contemplation of such acquisition) (including any requirement to obtain the consent, approval, license or authorization of any Governmental Authority or third party other than the Parent or any of its Affiliates (unless such consent is obtained)) from providing a guarantee, but only so long as such Subsidiary is prohibited from providing a guarantee or such consent is not obtained, (b) with respect to which the Agent determines, in consultation with the Borrowers, that the burden, effort or expense of the provision of a guarantee (including the incurrence of material adverse tax consequences to the Parent or its Subsidiaries) materially outweighs the benefit to the Agent and the Lenders of the provision of such guarantee, or (c) that is set forth on Schedule 1.1(c) as of the Closing Date; provided that immediately upon the occurrence of any event or circumstance whereby any such Subsidiary in the foregoing clause (a) no longer meets the criteria of an “Excluded Subsidiary” as set forth herein, or in the event that the Borrower Parties fail to consummate the dissolution of any Subsidiary set forth on Schedule 1.1(c) by the applicable date such dissolution was required under Section 7.18, such Subsidiary shall not be an Excluded Subsidiary and shall execute and deliver the agreements, instruments and other documents required by Section 7.12 in accordance with the terms thereof.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Lender or Agent or required to be withheld or deducted from a payment to any Lender or Agent:
(a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Person being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Term Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Term Loan or Commitment or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 3.3, amounts with respect to such Taxes were payable either to such Xxxxxx’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Person’s failure to comply with Section 3.3(c) (d) any U.S. federal withholding Taxes imposed under FATCA, and (e) any Canadian federal withholding Taxes imposed as a result of (i) a Lender not dealing at arm’s length (within the meaning of the Tax Act) with a Loan Party, (ii) a Lender being a Person who is a “specified non-resident shareholder” (as defined in subsection 18(5) of the Tax Act) of a Loan Party or who does not deal at arm’s length (within the meaning of the Tax Act) with any Person who is a “specified shareholder” (as that term is defined in subsection 18(5) of the Tax Act) of a Loan Party, or (iii) a Loan Party being a “specified entity” (as defined in subsection 18.4(1) of the Tax Act) in respect of a Lender.
“Exit Fee” has the meaning assigned to such term in Section 3.1(d).
“Exit Fee Percentage” means the rate set forth in the table below opposite the date on which the Exit Fee is required to be paid:
Prior to the first anniversary of the Closing Date |
2.0% |
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From the first anniversary of the Closing Date until the day prior to the second anniversary of the Closing Date |
3.0% |
From the second anniversary of the Closing Date until the day prior to the third anniversary of the Closing Date |
4.0% |
From the third anniversary of the Closing Date until the Maturity Date |
4.0% |
“Extraordinary Receipts” means any extraordinary, unusual or non-recurring cash proceeds received by any Borrower Party consisting of (a) proceeds of insurance, (b) condemnation awards (and payments in lieu thereof) or (c) proceeds of any Disposition, other than
(i) to the extent such proceeds are payable to a Person that is not a Borrower Party in accordance with applicable Requirements of Law or contractual obligations, or (ii) a Disposition permitted under clause (a), (b), (c), (d), (e), (h), (m) or (n) of the definition of “Permitted Dispositions” (in the case of clause (n), such exclusion applies only to the extent the Net Cash Proceeds in connection therewith are not required to be applied to a prepayment of the Term Loan in accordance with the text of clause (n)).
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantially comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(l) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.
“Federal Cannabis Laws” means any U.S. federal laws, civil, criminal or otherwise, as such relate, either directly or indirectly, to the cultivation, harvesting, production, distribution, transportation, sale and possession of cannabis, hemp, marijuana or related substances or products containing or relating to the same, including, without limitation, the prohibition on drug trafficking under 21 U.S.C. § 841(a), et seq., the conspiracy statute under 18 U.S.C. § 846, the bar against aiding and abetting the conduct of an offense under 18 U.S.C. § 2, the bar against misprision of a felony (concealing another’s felonious conduct) under 18 U.S.C. § 4, the bar against being an accessory after the fact to criminal conduct under 18 U.S.C. § 3, and federal money laundering statutes under 18 U.S.C. §§ 1956, 1957, and 1960 and the regulations and rules promulgated under any of the foregoing.
“Fee Letter” means the fee letter, dated as of the Closing Date, by and among the US Parent, the Agent and the FG Lender.
“FG Lender” means any Lender that is an affiliate of the Agent.
“Financing Debt” means, without duplication and with respect to any Person, (a) any Debt for borrowed money and (b) obligations of such Person (i) evidenced by bonds, debentures, notes or similar instruments and (ii) in the form of Capital Lease Obligations and purchase money Debt.
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“Fiscal Year” means the fiscal year of the Loan Parties ending on December 31 of each year.
“Foreign Subsidiary” means any Subsidiary of the Parent that is not a Domestic Subsidiary.
“FundCanna Notes” means the Debt and other obligations evidenced by the Loan and Security Agreement dated as of January 8, 2024, issued by ABI SF, LLC to FC Capital Holdings, LLC, the Loan and Security Agreement dated as of January 8, 2024, issued by BTHHM Berkeley, LLC to FC Capital Holdings, LLC, the Loan and Security Agreement dated as of January 8, 2024 (as amended from time to time), issued by Deep Thought, LLC to FC Capital Holdings, LLC, the Loan and Security Agreement dated as of January 8, 2024, issued by Xxxxxx Street Partners, LLC to FC Capital Holdings, LLC, the Loan and Security Agreement dated as of January 8, 2024, issued by RHMT, LLC to FC Capital Holdings, LLC, and the Loan and Security Agreement dated as of January 8, 2024, issued by Blue Ridge Wellness, LLC to FC Capital Holdings, LLC.
“Funding Notice” means the Funding Notice in the form of Exhibit D hereto or such other form acceptable to Agent.
“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time, set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions and comparable stature and authority within the accounting profession) that are applicable to the circumstances as of the date of determination.
“Governmental Authority” means any (domestic or foreign) federal, state, provincial, territorial, county, municipal, parish, provincial, or other government, or any department, commission, board, court, agency, or any other instrumentality of any of them or any other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory, or administrative functions of, or pertaining to, government, including, without limitation, any arbitration panel, any court, or any commission.
“Group Company” means each Borrower and each of their Subsidiaries.
“Guarantor” means the Parent, the US Parent and each other Person who now or hereafter executes a guaranty agreement, in form and substance reasonably satisfactory to Agent, pursuant to which such Person guaranties the Obligations.
“Highest Lawful Rate” means with respect to any Lender, the maximum non- usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Obligations under laws applicable to such Lender which are currently in effect or, to the extent allowed by Requirements of Law, under such applicable Requirements of Law which may hereafter be in effect and which allow a higher maximum non- usurious interest rate than applicable Requirements of Law now allow.
“Historical Financial Statements” means the balance sheet of each of Parent and the
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Borrowers and the related statements of income or operations, changes in shareholders’ equity and cash flows for the month ending June 30, 2024, including the notes thereto.
“Ilera Facility” means the Debt and other obligations evidenced by the Credit Agreement dated as of December 18, 2020, by and among WDB Holding PA, Inc., the lenders party thereto and Acquiom Agency Services LLC, as administrative agent.
“Increase Effective Date” shall have the meaning assigned to such term in Section 2.1(c)(ii).
“Incremental Amendment” shall have the meaning assigned to such term in Section 2.1(c)(ii).
“Incremental Commitment” shall have the meaning assigned to such term in
Section 2.1(c)(i).
“Incremental Term Loan” means any secured, first lien, term loan that may be issued by certain Lenders on any Increase Effective Date at the applicable Lenders’ discretion in accordance with Section 2.1(c).
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower Parties under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee” shall have the meaning assigned to such term in Section 11.6 hereof. “Initial Face Amount” means $114,000,000.
“Initial Term Loan” means the term loans advanced by the Initial Term Loan Lenders on the Closing Date in an amount equal to 95% of the Initial Face Amount.
“Initial Term Loan Commitment” means, as to each Initial Term Loan Lender, such Initial Term Loan Lender’s obligation to make the Initial Term Loan on the Closing Date, in an amount up to, but not exceeding the amount set forth for such Initial Term Loan Lender on Schedule 1.1(a) as such Initial Term Loan Lender’s “Initial Term Loan Commitment Amount”.
“Intellectual Property” means all present and future: trade secrets, know-how and other proprietary information; trademarks, trademark applications, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights and copyright applications; (including copyrights for computer programs) and all tangible and intangible property embodying the copyrights, unpatented inventions (whether or not patentable); patents and patent applications; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes,
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executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing.
“Intercompany Subordinated Note” means the Intercompany Subordinated Note, dated as of the Closing Date, made by and among the U.S. Parent and the Group Companies.
“Interest Rate” means 12.75% per annum, with interest payable hereunder to be calculated in accordance with Section 2.3 hereof.
“Investments” shall have the meaning assigned to such term in Section 8.7 hereof. “Joinder Agreement” means a joinder agreement, substantially in the form of
Exhibit B hereto, duly executed by a Subsidiary of a Borrower Party made a party hereto pursuant to Section 7.12(a).
“KISA Case” means 16 Holdings, LLC vs. KISA Enterprises MI, Inc. Case #22- 194390-CB Oakland County Circuit Court, Case No. 369754 Michigan Court of Appeals.
“Landlord Waiver” means a written waiver or subordination with respect to Collateral which is located on any Real Property which is not owned by any Borrower Party, or is stored on the premises of a bailee, warehouseman, or similar party, in each case made by and between the Agent and the owner of such Real Property, and (if necessary) acknowledged by the applicable Borrower Party, in form and substance reasonably satisfactory to the Agent.
“[***]” has the meaning specified in Section 8.19.
“Lease Agreement” means any lease, sublease or license of, or other agreement granting a possessory interest in, Real Property to which Borrower or any of its Subsidiaries is a party as lessor, lessee, sublessor, sublessee, licensor or licensee.
“Licensing Divisions” mean, collectively, the California Department of Cannabis Control, the Maryland Cannabis Administration, the Michigan Cannabis Regulatory Agency, the New Jersey Cannabis Regulatory Commission, the Pennsylvania Department of Health and each other Governmental Authority in each such state (or in any other applicable state of any Borrower) that issues Cannabis Licenses.
“Lien” means any security interest, mortgage, deed of trust, pledge, hypothecation, charge, claim, option, right to acquire, assignment, lien (statutory or other), or other encumbrance or other security or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any deposit arrangement or any financing lease involving substantially the same economic effect as any of the foregoing).
“Loan Documents” means this Agreement, the Note, the Pledge Agreement, the Security Agreement, the Mortgages, the Perfection Certificate, the Intercompany Subordinated Note, the Subordination Agreements, the Omnibus Collateral Assignment, the Landlord Waivers, the DACAs, the Fee Letter, and any document or instrument executed by any Loan Party and/or the Agent and/or Lenders in connection with any of the foregoing (including any required consents or approvals).
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“Loan Parties” means the Borrower Parties and the Guarantors.
“Local Cannabis Laws” means all of the laws, rules, regulations and guidance issued by the Licensing Divisions and other California, Maryland, Michigan, New Jersey or Pennsylvania Governmental Authorities pertaining to cannabis or, if applicable, hemp.
“Loss Event” shall have the meaning assigned to such term in Section 3.2(b). “Management Agreement” means any agreement or contract between a Borrower,
or its Subsidiaries, on the one hand, and any other cannabis business, on the other hand, pursuant to which (i) any Borrower Party or any of their Subsidiaries provide management services to such other cannabis business or (ii) pursuant to which any other cannabis business provides management services to Borrower Parties or any of their Subsidiaries.
“Material Adverse Effect” means a material adverse effect on any of (a) the operations, assets, liabilities, or financial condition of the Loan Parties taken as a whole, (b) the ability of the Loan Parties (taken as a whole) to perform their material obligations under the Loan Documents, (c) the legality, validity or enforceability of this Agreement or any other Loan Document, (d) the rights and remedies of any Lender under any Loan Document, (e) the validity, perfection or priority of a Lien in favor of the Agent on the Pledged Equity or any material portion of the other Collateral (except to the extent resulting solely from the action or inaction of the Agent or any Lender (such inaction limited solely to the failure to timely file a uniform commercial code continuation statement (UCC-3) to maintain the perfection afforded by the applicable underlying uniform commercial code financing statement (UCC-1)).
“Material Collateral” means, as it relates to the value of any tangible Collateral located on any Real Property of any Borrower Party, Collateral with an aggregate value of greater than $250,000, as reasonably determined by the Borrower Parties.
“Material Contract” means, with respect to any Group Company, (a) each Cannabis License listed on Schedule 1.1(d) or any other Cannabis License the loss of which would reasonably be expected to result in a Material Adverse Effect, (b) each contract or agreement to which such Group Company is a party involving aggregate consideration payable to or by such Group Company of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) or more in any Fiscal Year (other than (i) wholesale agreements, purchase orders or other commercial agreements in the ordinary course of the business of such Person or such Subsidiary, (ii) employment agreements, and (iii) contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than ninety (90) days’ notice without penalty or premium); (c) each Management Agreement; (d) each real property lease with annual rent exceeding Two Hundred Fifty Thousand Dollars ($250,000); and (e) all other contracts or agreements as to which the breach, nonperformance, cancellation or failure to renew by any party thereto would reasonably be expected to result in a Material Adverse Effect.
“Material Indebtedness” means the Pelorus Facility and any other Financing Debt with an outstanding principal amount at any time exceeding Three Million Dollars ($3,000,000).
“Material Real Property” means any fee owned Real Property of any Borrower Party (a) owned as of the Closing Date, or (b) acquired after the Closing Date, with an appraised
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value, conducted by a third-party appraiser reasonably acceptable to the Agent, in excess of Two Hundred Fifty Thousand Dollars ($250,000).
“Materials of Environmental Concern” means any material, substance or waste that is listed, regulated, or otherwise defined as hazardous, toxic, radioactive, a pollutant or a contaminant (or words of similar regulatory intent or meaning) under applicable Environmental Law, or which could give rise to liability under any Environmental Law, including but not limited to petroleum (including crude oil or any fraction thereof), petroleum by-products, toxic mold, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos or asbestos-containing material, flammable or explosive substances, or pesticides; provided, however, that the term “Materials of Environmental Concern” shall not include materials which otherwise would be included in such definition but which are of kinds and in amounts ordinarily and customarily used or stored in similar operations and/or properties, including, without limitation substances used for the purposes of cleaning, maintenance, or operations, substances typically used in construction, and typical products used in properties similar to any Real Property, and which are otherwise in compliance with all Environmental Laws.
“Maturity Date” means August 1, 2028.
“Maximum Borrower Liability” has the meaning specified in Section 3.4(c). “Michigan Joinder Parties” means each Subsidiary of US Parent which is a
borrower under the Chicago Atlantic Facility.
“Xxxxx’x” means Xxxxx’x Investors Service, Inc. and any successor thereto. “Mortgage” means any deed of trust, leasehold deed of trust, mortgage, leasehold
mortgage, deed to secure debt, leasehold deed to secure debt or other document creating a Lien on
any fee owned Real Property.
“Mortgaged Real Property” means any fee owned Real Property that is subject to a Mortgage in favor of the Agent (for the benefit of the Lenders) to secure any or all of the Obligations.
“Multiemployer Plan” means any multiemployer plan, as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or otherwise has any obligation or liabilities.
“Net Cash Proceeds” means, with respect to any issuance or incurrence of any Debt, any Disposition, or the receipt of any Extraordinary Receipts by any Person or any of its Subsidiaries, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of such Person or such Subsidiary, in connection therewith after deducting therefrom only (a) in the case of the proceeds of any Disposition or the receipt of any Extraordinary Receipts consisting of the proceeds of casualty insurance or condemnation awards, the amount of any Debt secured by any Permitted Lien on any asset subject to such Disposition, casualty or condemnation (other than Debt assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with the receipt thereof (other than Debt under this Agreement), (b) reasonable expenses related thereto incurred by such Person or such Subsidiary and paid to any
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Person that is not an Affiliate solely in connection with the collection thereof, (c) all income Taxes and other Taxes assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of or in connection with such transaction; provided that if the actual amount of Taxes paid is less than the estimated amount, the difference shall constitute Net Cash Proceeds, (d) in the case of any Disposition, any reserve for adjustment in respect of (i) the sale price of the applicable assets established in accordance with GAAP and (ii) any liabilities associated with the applicable assets and retained by any Group Company after such Disposition, (e) in the case of any Disposition, the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable and that are attributable to such Disposition, (f) the pro rata portion of any proceeds attributable to the minority interests in a non-wholly owned Subsidiary that are not available for distribution to or for the account of any Group Company as a result thereof, and (g) in the case of any Disposition, any funded escrow established pursuant to the documents evidencing any such Disposition to secure any indemnification obligations or adjustments to the purchase price associated therewith owing to any Person that is not an Affiliate of such Person, in the case of each of clauses (a) through (g), to the extent that the amounts so deducted are (i) actually paid to a Person that, except in the case of reasonable out-of-pocket expenses, is not an Affiliate of such Person or any of its Subsidiaries and (ii) properly attributable to such transaction (provided that, to the extent and at the time any such amounts are released from such reserve or escrow and are not required to be paid to such non-Affiliate Person, such amounts shall constitute Net Cash Proceeds).
“Net Income” means, for any period, the consolidated net income (or loss) of Parent and its Subsidiaries on a consolidated basis; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is merged into or consolidated with Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of Borrower) in which Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirements of Law applicable to such Subsidiary.
“Non-US Lender” means any Lender that is not a US Person.
“Note” means each promissory note issued under this Agreement, in the form of Exhibit C hereto.
“Obligations” means all of the obligations of the Loan Parties now or hereafter existing under the Loan Documents, whether for principal, interest, fees, expenses, prepayment premiums, indemnification or otherwise and the Loan Parties’ obligations to pay, discharge and satisfy the Erroneous Payment Subrogation Rights.
“Obligor’s Payment” has the meaning specified in Section 3.4(d).
“Omnibus Collateral Assignment” means the Omnibus Collateral Assignments entered into from time to time in favor of Agent of each Borrower Party’s rights under, (i) with respect to the Omnibus Collateral Assignment dated as of the Closing Date, (a) any Management
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Agreement, (b) any Lease Agreement and equipment lease agreement, (c) any Cannabis License and (d) any Material Contract, and (ii) with respect to any Omnibus Collateral Assignment entered into after the Closing Date, any Material Contract that is a Management Agreement or a Lease Agreement, but in each case, excluding any such agreement to the extent that it constitutes Excluded Collateral (as defined in the Security Agreement).
“Organization Documents” mean, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws; (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and
(c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Origination Discount” has the meaning assigned to such term in Section 2.2. “OSC” means the Ontario Securities Commission, or any Governmental Authority
succeeding to any of its principal functions.
“Other Connection Taxes” means, with respect to any Lender or Agent, Taxes imposed as a result of a present or former connection between such Lender or Agent and the jurisdiction imposing such Tax.
“Parent” has the meaning specified in the preamble. “Participant” has the meaning specified in Section 11.9(c).
“Participant Register” has the meaning specified in Section 11.9(c).
“Payment Account” means the account of Agent or its designee identified by Agent for receipt of each payment owed by Borrower hereunder.
“Payment Date” means the first day of each calendar month.
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any of its principal functions under ERISA.
“Pelorus Borrowers” means, collectively, TerrAscend NJ LLC, a New Jersey limited liability company, HMS Hagerstown, LLC, a Delaware limited liability company, HMS Processing, LLC, a Maryland limited liability company, and HMS Health, LLC, a Maryland limited liability company.
“Pelorus Facility” means the Loan Agreement dated as of October 11, 2022, among the Pelorus Borrowers, the Parent, the US Parent, Well and Good, Inc., and Pelorus Fund REIT, LLC.
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“Perfection Certificate” means the Perfection Certificate delivered in form and substance satisfactory to the Agent, on the Closing Date, as updated on the Delayed Term Loan Effective Date and updated thereafter pursuant to Section 7.2(e).
“Permitted Acquisition” means any Acquisition by any Group Company to the extent that each of the following conditions shall have been satisfied (or waived by the Agent in its sole discretion):
(i) primarily located in the U.S., (ii) organized under applicable U.S. and state laws, and (iii) not engaged, directly or indirectly, in any line of business other than the businesses in which the Group Companies are engaged on the Closing Date and any business activities that are substantially similar, related, ancillary or incidental thereto;
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“Permitted Dispositions” means any of the following, solely to the extent such disposition would not reasonably be expected to result in a Material Adverse Effect:
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(a) through (n) above for at least seventy-five percent (75%) cash consideration in an aggregate amount not less than the fair market value of such property or assets, so long as all such Dispositions do not exceed $10,000,000 in the aggregate.
“Permitted Liens” has the meaning specified in Section 8.3.
“Permitted Pelorus Refinancing Debt” means Debt incurred by any Pelorus Borrower or secured by any assets securing the Pelorus Facility; [***] (b) the Pelorus Borrowers shall have joined as Borrowers hereunder and satisfied the requirements of Sections 7.12(a) and (c) (provided that any security interest required to be granted pursuant to there shall only be required to be a second priority Lien), and either (c) each of the following conditions is satisfied: (i) the Total Debt to Adjusted EBITDA Ratio shall be less than 4.0:1.0, calculated on a pro forma basis giving effect to the incurrence of such Permitted Pelorus Refinancing Debt, (ii) the definitive documentation governing such refinancing Debt shall contain provisions allowing for general unrestricted use of cash by the applicable obligors (excluding customary and reasonable restrictions in third-party financing transactions, including any customary reserve accounts or liquidity covenants), (iii) the Agent shall have been granted a second priority Lien on all collateral securing such refinancing Debt pursuant to security documentation in form substantially similar to the security documentation governing such Permitted Pelorus Refinancing Debt, (iv) the Agent
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and the agent and/or lenders with respect to such refinancing Debt shall have entered into an intercreditor agreement on market terms and in any event satisfactory to the Agent, and (v) the maturity date of such refinancing Debt shall not be earlier than six (6) months following the Maturity Date, or (d) the Agent shall have consented to such refinancing Debt, which consent shall not be unreasonably withheld or delayed (provided that it shall be reasonable to withhold consent if such refinancing Debt would be materially adverse to the credit support provided to the Agent and the Lenders hereunder after giving effect thereto), and the Agent and the agent and/or lenders with respect to such refinancing Debt have entered into an intercreditor agreement on market terms and in any event satisfactory to the Agent.
“Permitted Purchase Money Debt” means, as of any date of determination, Debt (other than the Obligations, but including Capital Lease Obligations) incurred to finance the acquisition of any fixed assets secured by a Lien permitted under Section 8.3(k); provided, that (a) such Debt is incurred within forty-five (45) days after such acquisition and (b) such Debt when incurred shall not exceed the purchase price of the asset financed.
“Permitted Refinancing Debt” means the extension of maturity, refinancing or modification of the terms of Debt so long as:
“Permitted Third-Party Mortgage Debt” means any Debt secured by any Permitted Third-Party Mortgaged Property incurred by a Borrower and/or any applicable Subsidiary that owns such Permitted Third-Party Mortgaged Property (and, if applicable, guaranteed by the Parent, the US Parent or any applicable Borrower Holding Company), as evidenced by Permitted Third- Party Mortgage Documents; provided, that:
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“Permitted Third-Party Mortgage Debt Deposit Accounts” means, collectively, the deposit accounts maintained by a Borrower Party or any of its Subsidiaries and required pursuant to any Permitted Third-Party Mortgage Debt; provided that the cash on deposit therein is solely for the payment of real estate taxes, insurance, interest reserve or budgeted capital expenditures, in each case not exceeding the lesser of (a) the amount required to be deposited pursuant to the terms of the applicable Permitted Third-Party Mortgage Documents and (b) the amount budgeted for the immediately succeeding twelve (12) calendar month period; provided further that (i) any amounts for interest reserve or budgeted capital expenditures shall be deposited concurrently with the effectiveness of such applicable Permitted Third-Party Mortgage Debt and (ii) after the occurrence and during the continuance of an Event of Default, the Borrowers shall not be permitted to make any additional deposits in a Permitted Third-Party Mortgage Debt Deposit Account.
“Permitted Third-Party Mortgage Documents” means any loan agreement, promissory note, mortgage or other related agreement entered into by a Borrower Party or applicable Subsidiary (and, if applicable, the Parent, the US Parent or any applicable Borrower Holding Company) evidencing or relating to Permitted Third-Party Mortgage Debt and containing reasonably customary terms for a mortgage financing.
“Permitted Third-Party Mortgaged Property” means (a) any Real Property owned by a Borrower Party or any of their respective Subsidiaries, (b) the hereditaments, easements and appurtenances relating thereto, (c) the improvements and fixtures located thereon, (c) all plans and specifications relating to the applicable Real Property, (d) all contracts relating to maintenance and operation of the applicable Real Property, (e) all claims, causes of action relating to or arising out of the ownership and operation of the applicable Real Property, (f) any leases (if any) to any tenants of such Real Property, (g) any Permitted Third-Party Mortgage Debt Deposit Accounts, (h) documents or agreements to which such Loan Party is a party with contractors, architects or other professionals in connection with the planning, design, architectural, engineering, construction or other similar services relating to improvements on such Real Property, (i) permits required in
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connection with the construction of such improvements and/or operation of such Real Property and (j) all equipment, personal property, easements and other property and rights reasonably incidental to the ownership, lease or operation thereof.
“Person” means an individual, partnership, limited liability company, joint stock company, trust, unincorporated association, corporation, joint venture or other entity (including a business trust or a real estate investment trust), or a government or any political subdivision or agency thereof.
“Pinnacle Seller Notes” means (a) the Secured Promissory Note by and between KISA Pinnacle Holdings, LLC, a Michigan limited liability company (“KISA Pinnacle”), and Spartan Partners Properties, LLC, a Michigan limited liability company (“Spartan”), dated August 22, 2022 as amended June 27, 2023 for an original total sum of $5,300,000 and (b) the Secured Promissory Note by and between KISA Pinnacle and Spartan dated August 22, 2022 as amended June 27, 2023 for an original total sum of $4,700,000.
“Pinnacle Seller Notes Intercreditor” means an intercreditor agreement among KISA and the Agent, and acknowledged by the Michigan Joinder Parties, substantially similar to (and in the form of) that certain Intercreditor Agreement, dated as of August 22, 2022, between
Chicago Atlantic Admin, LLC and KISA Pinnacle Holdings LLC; provided that such intercreditor agreement shall also include restrictions on the payment to KISA (a) after the occurrence and during the continuance of an Event of Default and (b) prior to the dismissal with prejudice of the KISA Case and the KISA Judgment and, to the extent constituting a Lien on any Property of any Loan Party that is party to the KISA Case, a release, termination or discharge of any judgment Lien securing or obtained in connection the KISA Judgment.
“Plan” means an “employee benefit plan” within the meaning of Section 3(3) of ERISA as to which Borrower or its Subsidiary, or any professional employer organization acting as co-employer with respect to Borrower or Subsidiary, establishes for the benefit of its employees or for which Borrower or any Subsidiary has liability to make a contribution, including by reason of being an ERISA Affiliate, other than a Multiemployer Plan.
“Pledge Agreement” means the pledge agreement by and among the Agent, acting on behalf of the Lenders, and each applicable Loan Party party thereto executed and delivered simultaneously with this Agreement (as may be amended, restated, supplemented or otherwise modified from time to time).
“Pledged Equity” has the meaning specified in Section 4.1(a).
“Projections” means consolidated projections prepared by the management of the Loan Parties, inclusive of balance sheets, income statements, and cash flow statements, prepared by the Borrowers on an annual basis for the applicable period covered thereby, in form and substance reasonably satisfactory to Agent (it being agreed that the projections delivered by the Borrowers to the Lender prior to the Closing Date are satisfactory in form).
“Property” means any interest or right in any kind of property or asset, whether real, personal, or mixed, owned or leased, tangible or intangible, and whether now held or hereafter acquired, including all Real Property.
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“Quarterly Compliance Certificate” has the meaning specified in Section 7.2(d). “Real Property” means all real property held or used by Borrower or its
Subsidiaries, owned in fee simple or in which it holds a leasehold interest as a tenant.
“Real Property Deliverables” means any deliverable that may be reasonably requested by the Agent with respect to any fee owned Material Real Property owned by a Borrower Party and required to be subject to a Mortgage in favor of the Agent under the terms of this Agreement, including but not limited to (i) a Mortgage, (ii) to the extent requested by the Agent, an appraisal of the Real Property, (iii) a title policy, (iv) a non-invasive “Phase I” environmental site assessment (x) to the extent previously received by the Borrower Parties or (y) with respect to any fee owned Real Property used by a Borrower as a cannabis growing or cultivation facility, (v) a zoning report and (vi) if such Real Property is in a flood zone, a flood notification and evidence that flood insurance is in place for the buildings and their contents located thereon, each in form and substance reasonably satisfactory to the Agent; provided that, the Real Property Deliverables set forth in the foregoing clauses (ii), (iii) and (v) shall not be required for any such Real Property with a reasonably estimated fair market value of less than $2,000,000 unless required for the provision of a title policy.
“Refinanced Debt” means the Debt and all other obligations outstanding as of the Closing Date under the Ilera Facility, the Xxxxxxx Bank Facility and the FundCanna Notes.
“Register” shall have the meaning assigned to such term in Section 11.9(f). “Related Parties” means, with respect to any Person, such Person’s Affiliates and
the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors
and representatives of such Person and of such Person’s Affiliates.
“Reporting Jurisdictions” shall mean (a) all of the jurisdictions in Canada in which Parent is a “reporting issuer”, including, as of the date hereof, the Province of Ontario, and (b) if Parent’s capital stock is listed and posting for trading on the New York Stock Exchange or Nasdaq, the applicable reporting jurisdictions in the United States.
“Required Lenders” means, at any time, Lenders holding more than 50% of the principal amount of the outstanding Term Loans; provided, that the Lenders that constitute “Required Lenders” must also, at any time, include at least three Lenders which are not Affiliates.
“Requirements of Law” means, with respect to any Person, collectively, the common law and all federal, state, provincial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, except for federal laws and regulations promulgated pursuant to the Controlled Substances Act (21 U.S.C. § 811) pertaining to cannabis that conflict with applicable state law.
“Restricted Cannabis Activities” means, in connection with the cultivation,
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distribution, sale and possession of cannabis and related products: (a) any activity that is prohibited under applicable US State Cannabis Laws; (b) notwithstanding compliance with applicable US State Cannabis Laws, any activity which a Governmental Authority with jurisdiction over the Borrowers asserts in a written notice to any Borrower Party is unlawful under Federal Cannabis Law; (c) distribution and sale of cannabis and related products to minors; (d) payments to criminal enterprises, gangs, cartels and Persons subject to Sanctions; (e) non-compliance with anti-terrorism laws and other applicable law relating to money-laundering; (f) diversion of cannabis and related products from states where it is legal under US State Cannabis Law to other states or to Canada in violation of applicable law, or the import of cannabis and related products from Canada in violation of applicable law; (g) use of activities permitted under US State Cannabis Law as a cover or pretext for the trafficking of other controlled substances or illegal drugs or other illegal activity; (h) the commission or making threats of violence and the use of firearms in violation of applicable law;
(i) growing cannabis and related products on public lands; and (j) directly or indirectly, aiding, abetting or otherwise participating in a common enterprise with any Person or Persons in any of the activities described in the foregoing clauses (a) through (j).
“Restricted Payment” means (a) the declaration or payment of any dividend or other distribution, direct or indirect, on account of any Equity Interests of any Borrower Party, now or hereafter outstanding, (b) the making of any repurchase, redemption, retirement, defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests of any Borrower Party or any direct or indirect parent of any Borrower Party, now or hereafter outstanding, (c) the making of any payment to retire, or to obtain the surrender of, any outstanding warrants, options or other rights for the purchase or acquisition of shares of any class of Equity Interests of any Borrower Party, now or hereafter outstanding, (d) the return of any Equity Interests to any shareholders or other equity holders of any Borrower Party, or making of any other distribution of property, assets, shares of Equity Interests, warrants, rights, options, obligations or securities thereto as such, (e) the payment of any management, consulting, monitoring or advisory fees or any other fees or expenses (including the reimbursement thereof by any Loan Party) pursuant to any management, consulting, monitoring, advisory or other services agreement to any of the shareholders or other equityholders of US Parent, its Subsidiaries, or other Affiliates, or to any other Subsidiary, or other Affiliate of US Parent, or (f) any payment of principal or interest or any purchase, redemption, retirement, acquisition or defeasance with respect to any Subordinated Debt of any Borrower Party.
“Restricted Subsidiary” means each Subsidiary of a Borrower, other than an Excluded Subsidiary, and any other Subsidiary who joins this Agreement from time to time as a Borrower or Guarantor in accordance with the provisions of Section 7.12 hereunder.
“[***]” has the meaning specified in Section 8.19.
“Sale and Leaseback” means, with respect to any Group Company, any arrangement, directly or indirectly, with any Person whereby such Group Company shall dispose of any Property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such Property or other similar Property which it intends to use for substantially the same purpose or purposes as the Property being sold or transferred.
“Sales Tracking Software” shall mean any “seed-to-sale” tracking, point-of-sale, or other inventory or sales reporting software used by the Borrower Parties.
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“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, Cuba, Iran, North Korea, Syria, and the Crimea, Kherson, and Zaporizhzhia regions of the Ukraine).
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions- related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or by the United Nations Security Council, the European Union or any EU member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding any of its principal functions.
“Securities Act” means the Securities Act (Ontario) and the rules, regulations and published policies made thereunder.
“Security Agreement” means the security agreement by and among the Agent, acting on behalf of the Lenders, and the Borrower Parties, executed and delivered simultaneously with this Agreement, in the form and substance satisfactory to Agent (as may be amended, restated, supplemented or otherwise modified from time to time).
“Solvent” or “Solvency” means, at any time with respect to the Loan Parties and their Subsidiaries (taken as a whole), that at such time for such Loan Parties and their Subsidiaries
(a) the fair value of the property of such Persons (taken as a whole) is not less than the total amount of the liabilities of such Persons (taken as a whole), (b) the present fair salable value of the assets of such Persons (taken as a whole) is not less than the amount that will be required to pay the probable liability of such Persons on their existing debts as they become absolute and matured (taken as a whole), (c) such Persons are able to realize upon their assets (taken as a whole) and pay their debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business (taken as a whole), (d) such Persons do not intend to, and do not believe that they will, incur debts or liabilities beyond such Persons’ ability (taken as a whole) to pay as such debts and liabilities mature, and (e) such Persons are not engaged in business or a transaction, and are not about to engage in business or a transaction, for which their property (taken as a whole) would constitute unreasonably small capital.
“Specified Acquisition” means the transaction described on Schedule 1.1(e) attached hereto together with any change to the terms of such transaction that are (i) beneficial or accretive to the business of the Subsidiaries of Parent party to such transaction (as determined in good faith by the Borrower Representative) and not adverse to the interest of the Lenders in any material respect, or (ii) disclosed in writing by the Borrower Representative to the Agent and approved by the Agent (such approval not to be unreasonably withheld, delayed or conditioned).
“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The
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McGraw Hill Companies, Inc. and any successor thereto.
“Xxxxxxx Bank Facility” means the Debt and other obligations evidenced by the Business Loan Agreement dated as of June 26, 2023, by and between Ilera Healthcare, LLC and Xxxxxxx Bank National Association.
“Subordinated Debt” means Debt of any Group Company the terms of which (including, without limitation, payment terms, interest rates, covenants, remedies, defaults and other material terms) are satisfactory to the Agent and which has been expressly subordinated in right of payment to all Debt of such Group Company under the Loan Documents (a) by the execution and delivery of a Subordination Agreement, or (b) otherwise on terms and conditions satisfactory to the Agent.
“Subordination Agreements” means each subordination agreement by and between the applicable lender to any Borrower Party and Agent, in form and substance satisfactory to the Agent in its sole discretion.
“Subsidiary” means, with respect to any Person at any date, any corporation, limited or general partnership, limited liability company, joint venture, trust or estate, or other Person of or in which such Person or its other Subsidiaries own or control, directly or indirectly, more than fifty percent of (a) the combined voting power of all classes having general voting power under ordinary circumstances to elect a majority of the directors (if it is a corporation), managers or equivalent body of such Person, (b) the capital interest or profits interest of such Person, if it is a partnership, limited liability company, joint venture or similar entity, or (c) the beneficial interest of such Person, if it is a trust, association or other unincorporated association or organization. References to a Subsidiary shall mean any Subsidiary of the Borrower Parties to the extent applicable unless the context expressly provides otherwise.
“Synthetic Lease” means, as to any Person, (a) any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (i) that is accounted for as an operating lease under GAAP and (ii) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, or (b) (i) a synthetic, off-balance sheet or tax retention lease or (ii) an agreement for the use or possession of property (including a Sale and Leaseback), in each case under this clause (b), creating obligations that do not appear on the balance sheet of such person but which, upon the application of any debtor relief laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).
“Tax Act” means the Income Tax Act (Canada).
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Loan” means collectively, the secured, first lien term loans issued by the Lenders to the Borrowers in accordance with Section 2.1.
“Third Party Sale” means at any time that an Event of Default has occurred and
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continues to exist, the Agent’s enforcement of a sale process for the sale of the Collateral (including the Pledged Equity), including the authority to engage independent bankers, consultants, legal advisors and other professionals with the appropriate industry expertise to serve as advisors for a sale process at the sole expense of the Borrower Parties, in each case, as and to the extent permitted by the Loan Documents and applicable Requirements of Law.
“Title IV Plan” means any employee benefit plan (within the meaning of Section 3(3) of ERISA) subject to the provisions of Title IV of ERISA other than a Multiemployer Plan, as to which Borrower or any Subsidiary is making, or is obligated to make contributions, including as a result of being an ERISA Affiliate, or, during the preceding six calendar years, has made, or been obligated to make, contributions.
“Total Debt to Adjusted EBITDA Ratio” means, for any period, the ratio of (a) the aggregate principal amount of Debt of the Parent and its consolidated Subsidiaries consisting solely of Financing Debt to (b) Adjusted EBITDA for such period, in each case measured on a trailing twelve month basis for the period then ended.
“UFCA” has the meaning specified in Section 3.4(c). “UFTA” has the meaning specified in Section 3.4(c). “US Parent” has the meaning specified in the preamble.
“US Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“US State Cannabis Law” means any Local Cannabis Law and any law enacted by any other state of the United States which legalizes cannabis, hemp and related products in some form and which implements strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale and possession and other related activities of cannabis, hemp and related products.
“Voting Stock” shall mean, with respect to any Person, shares of such Person’s Equity Interests having the right to vote for the election of directors (or Persons acting in a comparable capacity) of such Person under ordinary circumstances.
SECTION 1.2 Terms Generally. The definitions in Section 1.1 apply equally to both the singular and plural forms of the terms defined. Whenever the context requires, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be construed as if followed by the words “without limitation”. A “Default” or “Event of Default” hereunder referenced as “continuing” (or any variation thereof) shall (a) with respect to a Default that has not yet matured into an Event of Default, be deemed to be continuing unless and until cured within any applicable cure period set forth in this Agreement (if susceptible to cure), and (b) with respect to an Event of Default, be deemed to be continuing unless and until waived in writing by Agent. The words “herein”, “hereof” and “hereunder” and words of similar import refer to this Agreement (including the Exhibits hereto) in its entirety and not to any part hereof, unless the context otherwise requires. All references herein to Articles, Sections, and Exhibits are references to Articles and Sections of, and
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Exhibits to, this Agreement unless the context otherwise requires. Unless the context otherwise requires, any references to any agreement or other instrument or statute or regulation are to such agreement, instrument, statute or regulation as amended and supplemented from time to time (and, in the case of a statute or regulation, to any successor provisions). Any reference in this Agreement to a “day” or number of “days” (without the explicit qualification of “business”) shall mean a calendar day or number of calendar days. If any action or notice is to be taken or given on or by a particular day, and such day is not a Business Day, then such action or notice shall be deferred until, or may be taken or given on, the next Business Day. All terms used in this Agreement which are defined in Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to time in the State of New York (the “Uniform Commercial Code” or the “UCC”) and which are not otherwise defined herein shall have the same meanings herein as set forth therein.
SECTION 1.3 Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, unless otherwise specified herein the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.
SECTION 1.4 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP consistent with those applied in the preparation of the financial statements referred to in Section 7.2. Notwithstanding anything to the contrary contained in the definition of “Capital Lease Obligations,” any change in accounting for leases pursuant to GAAP resulting from the adoption of Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842), to the extent such adoption would require treating any lease (or similar arrangement conveying the right to use) as a capital lease where such lease (or similar arrangement) would not have been required to be so treated under GAAP as in effect on December 31, 2015, such lease shall not be considered a capital lease, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.
ARTICLE II.
AMOUNTS AND TERMS OF THE TERM LOANS
SECTION 2.1 The Term Loans.
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(i) appropriately include any credit commitments or extensions contemplated by this Section 2.1(c), including to provide that any Incremental Term Loans shall share in the optional and mandatory prepayments and commitment reductions on a pro rata basis with the then outstanding Term Loans and (ii) with respect to the Pelorus Refinancing Incremental Commitment, provide for modifications to relevant covenant thresholds and baskets to be negotiated in good faith by the parties and which are commensurate with the additional credit support provided by the Pelorus Borrowers becoming Borrower Parties, taking into account the business conditions of the Loan Parties and their Subsidiaries at such time. The terms of the Incremental Commitment (which shall be set forth in the relevant Incremental Amendment) shall be determined by the Borrowers and the applicable Lenders providing the applicable Incremental Commitment, but in any event shall require (i) with respect to the Pelorus Refinancing Incremental Commitment, that: (A) the joinder of the Pelorus Borrowers as Borrowers hereunder and the grant of a first lien security interest in the assets securing the Pelorus Facility pursuant to Section 7.12 to secure the financing by the applicable Lenders pursuant to this Section 2.1(c), (B) upon consummation of the financing by the applicable Lenders pursuant to this Section 2.1(c), the Pelorus Facility shall have been terminated and repaid in full and all liens granted in connection therewith shall have been terminated and (C) no Default or Event of Default shall have occurred or be continuing or would result therefrom or from the making of the additional Term Loans and the use of proceeds therefore, and (ii) with respect to any Additional Incremental Commitment, that: (A) the Required Lenders shall have consented to the incurrence of such Additional Incremental Commitment, (B) no Default or Event of Default shall have occurred or be continuing or would result therefrom or from the making of the additional Term Loans and the use of proceeds therefore and (C) payment of any fees required by the Agent and/or the Lenders, and previously agreed to in writing by the Borrowers, providing the Additional Incremental Amendment. Each Incremental Commitment shall become effective as of the date of the applicable Incremental Amendment (an “Increase Effective Date”), and the applicable Incremental Term Loans shall be funded on the applicable Increase Effective Date. On each Increase Effective Date, Schedule 1.1(a) shall be deemed to have been amended to reflect the applicable Incremental Commitment of the Lenders as provided in the applicable Incremental Amendment.
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SECTION 2.2 Origination Discount. Each Borrower acknowledges that the Term Loan will be funded with a non-refundable discount (the “Origination Discount”) of five percent (5%) of the Initial Face Amount and, if applicable, the Delayed Term Loan Face Amount, inclusive of all finally allocated commitments. The Origination Discount shall be reflected as a dollar-for-dollar reduction in the advance of the Initial Term Loan on the Closing Date and, if applicable, of the Delayed Term Loan on the Delayed Term Loan Effective Date, as applicable. The parties intend that the Origination Discount shall be treated as consideration for the use or forbearance of money. The Borrowers and Xxxxxxx acknowledge that the Origination Discount will constitute original issue discount (as that term is used in Section 1273(a) of the Code) solely for U.S. federal, state and local income tax purposes and, as such, is not being advanced to the Borrowers.
SECTION 2.3 Interest. The Initial Term Loan shall bear interest from and including the Closing Date, at the Interest Rate. The Delayed Term Loan shall bear interest from the Delayed Term Loan Effective Date, at the Interest Rate. The Borrowers promise to pay interest on the outstanding principal balance of the Term Loans in cash in arrears on each Payment Date with respect thereto, as set forth in Section 3.1(a) below. Automatically upon the occurrence and during the continuance of any Event of Default described in Section 9.1(a)-(c) and Section 9.01(j), and at the written election of the Agent (at the direction of the Required Lenders) following the occurrence and during the continuance of any other Event of Default, the Term Loan shall bear interest at the Default Rate on the then on the outstanding principal balance of the Term Loans and shall be paid in cash in accordance with Section 3.1(e). If the Default Rate applies pursuant hereto, then, at the election of the Agent (acting at the direction of the Required Lenders), the Default Rate shall be deemed to accrue commencing on the date of the breach or event giving rise to the applicable Event of Default.
All computations of interest hereunder shall be made on the basis of a year of the actual number of days elapsed of a year of 360 days and (including the first day but excluding the last day) occurring in the period for which such interest is payable.
ARTICLE III. PAYMENTS, PREPAYMENTS, TAXES
SECTION 3.1 Payments and Computations.
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SECTION 3.2 Prepayments.
$100,000) to such use of proceeds, Borrower shall use such proceeds to so replace, repair or restore such properties in a manner reasonably satisfactory to Agent, subject to the limitation that upon the occurrence of the Reinvestment Termination Date or the occurrence of an Event of Default, such Net Cash Proceeds, if not theretofore so used as contemplated by this Section 3.2(b), shall be used to prepay the Obligations; provided that, if together with such notice provided to the Agent the Borrowers demonstrate that, both immediately before and after giving effect the proposed reinvestment, the Borrowers would maintain a Borrower Total Debt to Adjusted EBITDA Ratio of less than 3.5:1.0, then the Agent’s consent shall not be required in connection with the reinvestment of such Net Cash Proceeds.
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SECTION 3.3 Taxes.
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SECTION 3.4 Joint and Several Obligations.
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ARTICLE IV. SECURITY
SECTION 4.1 Grant of Security Interest. The Loan Parties have entered into the Security Agreement and the Pledge Agreement, as applicable, each in favor of the Agent, on behalf of the Lenders, to grant to the Agent a first priority lien (subject to Permitted Liens) and security interest in the Collateral (including certain Equity Interests owned by the Loan Parties (the “Pledged Equity”)), in each case, to secure prompt repayment of any and all Obligations and in order to secure prompt performance by Borrower Parties of their covenants and duties under the Loan Documents. Following any Event of Default hereunder (and during the continuance thereof), the Agent will immediately have the right to exercise the remedies set forth in Article X hereof, in addition to exercising any and all of its other rights and remedies under Requirements of Law, hereunder and under the other Loan Documents.
SECTION 4.2 Delivery of Additional Documentation Required. The Loan Parties shall execute and deliver to the Agent, on behalf of the Lenders, at any time and from time to time at the reasonable request of the Agent, all financing statements, continuation financing statements, fixture filings, security agreements, assignments, endorsements of certificates of title, applications for title, affidavits, reports, notices, schedules of accounts, letters of authority, Real Property Deliverables, and all other documents that the Agent may reasonably request, in form reasonably satisfactory to the Agent, to perfect and maintain perfection of the Agent’s security interests in the Collateral (including for the avoidance of doubt, Real Property Collateral) and in order to fully consummate all of the transactions contemplated under the Loan Documents.
SECTION 4.3 Release of Security Interest. Upon the payment in full in cash of the outstanding Obligations (other than inchoate obligations for indemnification or unasserted claims for reimbursement), the security interests granted pursuant to Loan Documents shall automatically terminate (other than provisions therein that are expressly intended to survive), the Borrower Parties (or their designee) shall be authorized to file evidence of termination of the same. Upon the permitted Disposition of any Collateral of any Borrower Party pursuant to the terms of Section 8.8, the security interests granted in such applicable Collateral pursuant to Loan
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Documents shall automatically terminate. The Agent and the Lenders agree to, at the sole expense of the Borrowers, execute and deliver such releases of the security interest in the Collateral as may be reasonably requested by the Borrowers.
ARTICLE V. CONDITIONS OF LENDING
SECTION 5.1 Conditions Precedent to the Initial Term Loan. The obligation of the Lenders to make the Initial Term Loan on the Closing Date is subject to the conditions precedent that:
substance:
Borrowers in favor of such Lender in the amount of such Lender’s applicable commitment in respect of the Term Loan on the Closing Date;
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and
financing statements on Form UCC-1 in such office or offices as may be necessary or, in the reasonable opinion of the Agent, desirable to perfect the security interests purported to be created by the Security Agreement.
SECTION 5.2 Conditions Precedent to the Delayed Term Loan. The obligation of the Delayed Term Loan Lenders to make any Delayed Term Loan is subject to the fulfillment (or waiver by the Agent (acting at the direction of the Required Lenders)) in a manner reasonably satisfactory to the Agent, of each of the following conditions precedent:
(5) days (or such shorter time as the Agent may agree in writing) in advance of the proposed
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Delayed Term Loan Effective Date, and, promptly upon receipt thereof, the Agent shall notify each Delayed Term Loan Lender of the proposed borrowing;
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The Agent, Xxxxxxx and Loan Parties agree that, to the extent of any conflict between the terms of this Section 5.2 and the conditions precedent set forth in the Joinder Agreement to be entered into by the Michigan Joinder Parties on the Delayed Term Loan Effective Date, the terms of this Section 5.2 shall govern.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement, each applicable Loan Party (solely as to itself and its applicable Loan Party Subsidiaries (if any)) represents and warrants to the Lenders as of the date hereof that:
SECTION 6.1 Existence. Such Loan Party and each of its Loan Party Subsidiaries, as applicable, is duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated or organized and is duly qualified or licensed to do business in all jurisdictions where its Property is owned or the business transacted by it makes such qualification necessary, except where the failure to be qualified or licenses would not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.3 Binding Obligations. Each Loan Document to which it is (or they are) a party constitutes the legal, valid and binding obligation of Loan Party and each of its Loan Party Subsidiaries (if any), as applicable, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies.
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SECTION 6.4 Financial Statements; No Material Adverse Effect.
SECTION 6.5 Intellectual Property.
(iii) neither such Borrower nor any of its Restricted Subsidiaries (if any) is in breach of, or in default under, any material license of Intellectual Property by any other person to such Borrower or any of its Restricted Subsidiaries (if any), and (iv) no proceedings have been instituted or are pending against such Borrower or any of its Restricted Subsidiaries (if any) or, to the knowledge
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of such Borrower, are threatened, and no claim against such Borrower or any of its Restricted Subsidiaries (if any) has been received by such Borrower or any such Restricted Subsidiary, alleging any such infringement or misappropriation.
SECTION 6.6 Properties.
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SECTION 6.7 Equity Interests and Subsidiaries. Schedule 6.7 sets forth
SECTION 6.8 Investment Company Act. No Loan Party is required to register as an “investment company” or a company “controlled” by an “investment company,” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.
SECTION 6.9 No Material Misstatements.
SECTION 6.10 Labor Matters.
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SECTION 6.11 ERISA.
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SECTION 6.12 Environmental Matters. The Borrowers are in compliance with all applicable Environmental Laws including obtaining, maintaining and complying with all Environmental Permits required for their current or intended operations or for any Property owned, leased, or otherwise operated by any of them in all material respects. The Guarantors are in compliance with all applicable Environmental Laws including obtaining, maintaining and complying with all Environmental Permits required for their current or intended operations or for any Property owned, leased, or otherwise operated by any of them in all material respects, except to the extent failure to so comply would not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.13 Insurance. Schedule 6.13 sets forth a true, complete and accurate description in all material respects and in reasonable detail of each Borrower Party’s general commercial liability and property or casualty policies maintained as of the Closing Date. Each Borrower Party is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged. No Borrower Party (i) has received notice from any insurer or agent of such insurer that substantial capital improvements or other material expenditures will have to be made in order to continue such insurance or (ii) has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers.
SECTION 6.14 Security Documents. The Security Agreement, Pledge Agreement, and Mortgages (if any) (collectively, the “Security Documents”) are effective to create in favor of the Agent, for the benefit of the Lenders, a legal, valid, binding and enforceable security interest in and pledge of the Collateral described therein and proceeds and products thereof. In the case of (i) pledged Equity Interests represented by certificates, if any, (x) when such certificates are delivered to the Agent for possession within the State of New York or (y) when financing statements in appropriate form under the UCC with respect to each such Borrower Party are filed, all related filing fees are paid, and such financing statements are registered and indexed, and (ii) the other Collateral described in the Security Agreement, when financing statements in appropriate form under the UCC with respect to each such Borrower Party are filed, all related filing fees are paid, and such financing statements are registered and indexed, the Lien created by the Security Agreement in such Collateral shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds and products thereof, to the extent such Lien may be perfected by the filing of a financing statement under the UCC, as security for the Obligations, in each case, prior and superior in right to any other Person (except,
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with respect to priority only, Permitted Liens).
SECTION 6.15 PATRIOT Act, etc. To the extent applicable, each Loan Party is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the PATRIOT Act. No part of the proceeds of the Term Loan will be used, directly or indirectly, for any payment to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
SECTION 6.16 Anti-Money Laundering Laws.
(i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to Executive Order
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No. 13224.
SECTION 6.17 Anti-Corruption Laws and Sanctions.
SECTION 6.18 Reserved.
SECTION 6.19 Taxes; Governmental Charges. Such Loan Party and each of its Subsidiaries has filed prior to delinquency all material federal, state, provincial, and foreign income tax returns which are required to be filed, and has paid or caused to be paid all Taxes as shown on such returns or on any assessment received by it prior to the date such Taxes have become overdue, except any Taxes that are being contested in good faith and by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP.
SECTION 6.20 Compliance with Law. The business and operations of such Loan Party and any of the Group Companies as conducted as of the Closing Date, are in compliance with all Requirements of Law in all material respects. No Loan Party or any Group Company is engaged in any Restricted Cannabis Activities.
SECTION 6.21 Absence of Financing Statements. Except for Permitted Liens or those filings or recorded documents evidencing or relating to Permitted Liens, there is no financing statement, security agreement, chattel mortgage, real estate mortgage/deed of trust or other document filed or recorded with any filing records, registry or other public office, that purports to cover, affect or give notice of any present or possible future lien on, or security interest in, the Property of any Borrower Party.
SECTION 6.22 Litigation. Except as set forth in Schedule 6.22, as of the Closing Date, there are no actions, suits, proceedings or investigations of any kind pending or, to the knowledge of such Loan Party, threatened against such Loan Party or any of Group Company before any court, tribunal or administrative agency or board which, (a) if adversely determined, would reasonably be expected to result in a Material Adverse Effect or (b) purport to affect or pertain to this Agreement or any other Loan Document or any of the transactions contemplated hereby.
SECTION 6.23 Solvency. The Loan Parties and their Subsidiaries, taken as a whole, before and immediately upon giving effect to the incurrence of the Initial Term Loan hereunder on the Closing Date are Solvent.
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SECTION 6.24 Material Contracts. Schedule 6.24 contains a true, accurate and complete list in all material respects of each Material Contract to which a Borrower Party is a party as of the Closing Date, each of which is in full force and effect and is binding upon and enforceable against each Borrower Party that is a party thereto and, to the best knowledge of such Borrower Party, all other parties thereto in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies. Neither such Borrower Party nor any of its Restricted Subsidiaries is presently in material default (beyond any applicable grace or cure period), or has received a notice that it is in default, under any Material Contract to which it is a party and has not received any written notice of the intention of any other party (including any Governmental Authority) thereto to terminate, revoke, or suspend any Material Contract or of any alleged non-compliance thereunder.
SECTION 6.25 No Default or Event of Default. No event has occurred or is continuing which constitutes, or could reasonably be expected to result in, a Default or Event of Default hereunder.
SECTION 6.26 No Conflicts. The execution, delivery and performance by such Loan Party and any of its Loan Party Subsidiaries (if any) of this Agreement and other Loan Documents to which they are a party and the transactions contemplated by this Agreement (i) do not require any consent (including any Cannabis License), exemption, authorization or approval of, registration or filing with, or any other action by, any Governmental Authority, except (A) such as have been obtained or made and are in full force and effect, (B) filings necessary to perfect or maintain the perfection or priority of the Liens created by the Security Agreement and Pledge Agreement and (C) filings with and submissions to any Governmental Authority as required by applicable law, (ii) will not violate the organizational documents of any Loan Party or any of its Subsidiaries, (iii) will not violate or result in a default or require any consent or approval under any indenture, instrument, agreement, or other document binding upon any Loan Party or its property or to which any Loan Party or its property is subject, or give rise to a right thereunder to require any payment to be made by any Loan Party, (iv) will not violate any Requirement of Law in any material respect and (v) other than Liens created by the Loan Documents, will not result in the creation or imposition of any Lien on any property of any Loan Party, except, in each case with respect to clauses (i), (iii) and (iv) of this Section 6.26, for consents, authorizations or approvals obtained on or before the Closing Date.
SECTION 6.27 Reserved.
SECTION 6.28 Bank Accounts. Schedule 6.28 contains a true, accurate and complete list in all material respects of each Bank Account of the Borrower Parties as of the Closing Date.
ARTICLE VII. AFFIRMATIVE COVENANTS
So long as any Obligation shall remain unpaid (other than inchoate indemnity obligations for which no claim has been asserted), each Borrower covenants and agrees that, unless the Agent shall otherwise consent in writing:
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SECTION 7.1 Compliance.
SECTION 7.2 Reporting and Notice Requirements. The Borrowers will furnish to the Agent:
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(120) days after the end of each Fiscal Year, balance sheets (which are to be consolidated, if applicable), statements of operations, changes in partnership capital and statements of cash flows of the Parent and its consolidated Subsidiaries as at the end of such Fiscal Year, setting forth in each case in comparative form the figures for the corresponding date or period set forth in (A) the financial statements for the immediately preceding Fiscal Year, and (B) the Projection, all in reasonable detail and prepared in accordance with GAAP, and accompanied by a report and an opinion, prepared in accordance with generally accepted auditing standards, of independent certified public accountants of recognized standing selected by the Parent and reasonably satisfactory to the Agent (it being acknowledged and agreed by the Agent that MNP LLP is an acceptable independent public accounting firm) (which opinion shall be without any qualification or exception as to the scope of such audit, and the failure to deliver such an unqualified opinion shall be a breach of this covenant (except for a qualification limited solely to the current maturity of any Debt)).
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(iii) all insurance coverage required hereunder is being maintained and there have been no claims filed under such policies; (iv) no material lawsuits or material claims have been threatened in writing or filed against any Loan Party; (v) there have not been any investigations, inquiries, or other disciplinary actions by any Governmental Authority required to be disclosed pursuant to Section 7.2(g), except as has already been disclosed to the Agent in accordance with such section;
(vi) and (vii) a summary of the status of any Permitted Acquisitions required to be disclosed to the Agent pursuant to terms hereof, including copies of related term sheet and letters of intent.
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Documents required to be delivered pursuant to Section 7.2(a), (b) or (c) (to the extent any such documents are included in materials otherwise filed with the Canadian Securities Authorities or OSC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which such materials are publicly available and posted on the Parent’s profile on the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval + (“SEDAR+”); or (ii) on which such documents are posted on the Parent’s behalf on an internet or intranet website, if any, to which each Lender and the Agent have access (whether a commercial, third-party website or whether made available by the Agent); provided that: (A) upon written request by the Agent (or any Lender through the Agent) to the Borrower Representative,
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the Borrower Representative shall deliver paper copies of such documents to the Agent or such Lender within three (3) Business Days of the applicable document being posted on SEDAR+ or posted on an internet or intranet website until a written request to cease delivering paper copies is given by the Agent or such Lender and (B) if no written request has been delivered to the Borrower Representative in accordance with subsection (A) of this paragraph, the Borrower Representative shall notify the Agent and each Lender (e-mail to suffice) of the posting of any such documents within three (3) Business Days of such posting, and provide to the Agent electronic versions (i.e., soft copies) of such documents.
SECTION 7.3 Use of Proceeds. The proceeds of the Term Loan made on the Closing Date shall be used only as described in the letter of direction provided by the Borrowers to the Agent on the Closing Date in connection with the sources and uses of the Initial Term Loan and for ordinary working capital purposes of the Borrower Parties.
SECTION 7.4 Taxes and Liens. The Borrower Parties will (a) pay, discharge or otherwise satisfy prior to delinquency all of their Federal, state and other material obligations and liabilities in respect of Taxes imposed upon it or upon its income or profits or in respect of its Property, taking into account 26 U.S. Code §280E (to the extent applicable), except, in each case, (i) to the extent any such Tax is being contested in good faith and by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP, (ii) if such failure to pay or discharge such obligations and liabilities would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and (b) timely and accurately file all federal, state and other material Tax returns required to be filed.
SECTION 7.5 Maintenance of Property and Licenses.
SECTION 7.6 Right of Inspection. Upon not less than three (3) Business Days’ prior written notice by the Agent to the Borrower Representative (except that during the continuance of an Event of Default, only one (1) Business Day’s prior written notice shall be required), the Borrower Parties will permit the Agent and any representative of the Agent (including but not limited to Agent’s engineer, architect, or inspector) from time to time during
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normal business hours to examine and make copies of and abstracts from its records and books of account, to visit and inspect its properties, to verify notes, accounts receivable, deposit accounts and its other assets, to conduct audits, physical counts, valuations, appraisals or examinations and to discuss its affairs, finances and accounts with any of its directors, officers or managerial employees or independent accountants (provided that a representative of the Loan Parties shall be provided the opportunity to be present for any meeting with the Parent’s independent accountants); provided, however, that so long as no Event of Default has occurred or is continuing the Borrower Parties shall only be responsible for the cost of one (1) such inspection per fiscal year. In furtherance of the foregoing, each Loan Party hereby authorizes its independent accountants to discuss the affairs, finances and accounts of such Person (independently or together with representatives of such Person) with the Agent in accordance with this Section 7.6.
SECTION 7.7 Insurance. The Borrower Parties will maintain or cause to be maintained with financially sound and reputable insurers, casualty insurance, such public liability insurance, third party property damage insurance, and, solely to the extent any Mortgaged Real Property is located in a flood zone, flood risk insurance, in each case with respect to liabilities, losses or damage in respect of the assets, properties and businesses of the Borrower Parties as the as may customarily be carried or maintained by Persons of established reputation engaged in business in the applicable jurisdiction, in each case in such amounts (giving effect to self- insurance), with such deductibles, covering such risks and otherwise on such terms and conditions shall be customary for such persons. All casualty policies covering the Collateral are to be made payable to the Agent in case of loss, under a standard noncontributory “lender” or “secured party” clause and are to contain such other provisions as the Agent may require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies. Subject to Section 7.19, if applicable, the Borrower Parties will cause Agent to be named as an additional insured, loss payee and insured mortgagee, as applicable, on each general commercial liability and casualty insurance policy pursuant to endorsements in form and content reasonably acceptable to Agent. Copies of all certificates of insurance are to be delivered to the Agent, with the loss payable and additional insured endorsement in favor of the Agent for the benefit of the Lenders, as their respective interests may appear, and shall provide for not less than 30 days’ (10 days’ in the case of non-payment) prior written notice to the Agent of the exercise of any right of cancellation. If any Borrower Party fails to maintain the insurance required under this Section 7.7, the Agent, after prior written notice to the Borrower Representative, may arrange for such insurance, but at the Borrowers’ expense and without any responsibility on the Agent’s and Lenders’ part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Upon the occurrence and during the continuance of an Event of Default, the Agent shall, upon the direction of the Lenders, have the sole right, in the name of the Lenders, to direct any Borrower Party to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.
SECTION 7.8 Maintenance of Office. The Borrower Parties will maintain their chief executive office at 000 X. Xxxxx Xx., Xxx 000, Xxxx xx Xxxxxxx, XX 00000, or at such other place in the United States of America as the Borrower Representative shall designate upon written notice to the Agent, where notices, presentations and demands to or upon the Borrowers in
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respect of the Loan Documents to which the Borrowers are a party may be given or made.
SECTION 7.9 Existence. Each Borrower Party will preserve and maintain its legal existence and all of its rights, privileges, licenses, contracts and property and assets used or useful to its business, except where the failure to maintain and preserve such rights, privileges, licenses, contracts, property or assets would not reasonably be expected to have a Material Adverse Effect, except in each case, for transactions permitted under Section 8.4.
SECTION 7.10 Deposit Account Control Agreements. On or before the Closing Date, unless extended by the Agent in its sole discretion, the Borrower Parties shall have delivered to the Agent a fully executed deposit account control agreement (the “DACA”), in form and substance reasonably satisfactory to the Agent, with respect to each Bank Account (other than an Excluded Account). In the event that any Borrower Party opens any new Bank Account (other than an Excluded Account) after the date hereof, such Borrower Party shall deliver to the Agent a fully executed DACA, in form and substance reasonably satisfactory to the Agent, prior to or simultaneously with opening such new Bank Account, unless otherwise agreed by the Agent in writing in its sole discretion, it being acknowledged and agreed to by the Agent that with respect to any DACA required to be delivered after the date hereof from a depositary institution that has previously entered into a DACA in connection with the Loan Documents, shall be deemed to be reasonably satisfactory to the Agent so long as such new DACA is substantially in the form of such previously agreed to DACA.
SECTION 7.11 Landlord Waivers; Collateral Access Agreements. With respect to (a) any Real Property which is not owned by a Borrower Party (i) where at any time any Material Collateral is located or (ii) that is operated as a dispensary in Pennsylvania or Maryland, or (b) any location where Material Collateral is stored on the premises of a bailee, warehouseman, or similar party location, then in each case such Borrower will and shall cause any of its applicable Restricted Subsidiaries, to use commercially reasonable efforts to obtain written subordinations or waivers or collateral access agreements as the case may be, in form and substance reasonably satisfactory to the Agent until such time the parties mutually agree otherwise.
SECTION 7.12 Additional Borrowers, Guarantors and Collateral Security.
(2) to the extent joining this Agreement as a Guarantor, a guaranty agreement, in form and substance reasonably satisfactory to Agent, pursuant to which such Subsidiary shall guaranty the Obligations; (3) supplements to each of the Security Agreement and the Pledge Agreement together with (A) certificates, if any, evidencing all of the Equity Interests of any Person owned by such Subsidiary required to be pledged under the terms of the Pledge Agreement, (B) undated stock powers for such certificated Equity Interests, if any, executed in blank, and (C) such opinions of counsel as the Agent may reasonably request; (4) Omnibus Collateral Assignments in favor of Agent for any Material Contracts of such newly formed or acquired Subsidiary; (5) a joinder to the Intercompany Subordinated Note, pursuant to which such Subsidiary shall be made a party to the Intercompany Subordinated Note as an Affiliated Obligor (as defined in the Intercompany
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Subordinated Note) thereunder; and (6) such other agreements, instruments, approvals or other documents reasonably requested by the Agent in order to effect the intent that such Subsidiary shall become bound by all of the terms, covenants and agreements contained in the Loan Documents and that all property and assets of such Subsidiary shall become Collateral for the Obligations.
SECTION 7.13 Anti-Corruption Laws and Anti-Money Laundering Laws.
SECTION 7.14 Lender Meetings. The Borrower Parties will participate in quarterly (or if requested by the Agent, monthly) conference calls or, to the extent agreed by Borrowers and Agent, in person meetings with the Agent and those Lenders electing to participate, such conference calls and meetings to be held at such time as may be agreed to by the Borrowers and the Agent; provided, that, the failure to hold any such meeting resulting primarily from the action or inaction of the Agent or any Lender shall not be deemed to a breach of the Borrower Parties’ obligations under this Section 7.14.
SECTION 7.15 Lien Releases. Prior to the commencement of any construction, improvement or related activity on any Material Real Property after the date the Mortgage on such Real Property has been recorded, the Borrowers shall obtain a Lien release or subordination of Lien, in form and substance reasonably satisfactory to the Agent, from each contractor, mechanic, materialman, laborer or other Person involved with the construction, build- out and equipping of any Real Property that also provided work, supplies or services, or has an
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Affiliate that provided work, supplies or services, on such Real Property prior to the date the Mortgage on such Real Property was recorded.
SECTION 7.16 Sales-Tracking Software. Upon the written request of the Agent after the occurrence and during the continuance of an Event of Default, the Borrowers shall grant to the Agent view access with respect to their Sales Tracking Software; provided that, such access shall be reasonably limited to ensure that the Borrowers are not disclosing any personally identifiable information of any customers of a Borrower or otherwise in breach of any confidentiality obligations imposed on a Borrower.
SECTION 7.17 Further Assurances. Borrowers will and shall cause their Restricted Subsidiaries to cooperate with the Agent and execute such further instruments and documents as the Agent shall reasonably request to carry out to its satisfaction the transactions contemplated by this Agreement and the other Loan Documents.
SECTION 7.18 Post-Closing Obligations. Comply with the provisions set forth in Schedule 7.18 within the time periods set forth therein (or such later date to which the Agent consents in its sole discretion).
SECTION 7.19 Securities Laws Matters. Parent shall (a) maintain the listing and posting for trading of its common shares on the Toronto Stock Exchange unless such capital stock is listed and posting for trading on the New York Stock Exchange or Nasdaq or another duly authorized stock exchange in the United States or Canada (so long as any transition of the listing of such capital stock is not the result of a failure of Parent to comply with the listing requirements of the applicable stock exchange), in which case it shall maintain such listing and posting on such exchange, and (b) maintain its status as a filer with the US Securities and Exchange Commission or the equivalent thereof in Canada, and, in each case not in default (beyond any notice and cure period) of the requirements of the Applicable Securities Legislation in the Reporting Jurisdictions.
ARTICLE VIII. NEGATIVE COVENANTS
So long as any Obligation shall remain unpaid (other than inchoate indemnity obligations for which no claim has been asserted), each Borrower and, solely with respect Section 8.17, US Parent, covenants and agrees that, without the prior written consent of the Agent, it will not, and, solely with respect to each Borrower, will not permit any of its respective Restricted Subsidiaries to:
SECTION 8.1 Restrictive Agreements, Etc. Each Borrower Party will not, and will not permit any of its Restricted Subsidiaries to, enter into any agreement (other than a Loan Document) prohibiting:
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The foregoing prohibitions shall not apply to (i) customary restrictions of the type described in clauses (b) and (c) above (which do not prohibit the Borrower Parties from complying with or performing the terms of this Agreement and the other Loan Documents) which are contained in any agreement, (ii) restrictions or conditions contained in contracts, leases and documents governing (A) Financing Debt in existence as of the Closing Date and (B) any Permitted Purchase Money Debt, (iii) for the assignment of any contract or licensed intellectual property entered into by any Borrower Party or any of its Subsidiaries in the ordinary course of business, (iv) for the transfer of any asset pending the close of the sale of such asset pursuant to a Disposition permitted under this Agreement, (v) restrictions under documents evidencing or governing (A) the Pelorus Facility and (B) subject to compliance with Section 8.19, Permitted Pelorus Refinancing Debt, and
(v) with respect to any lease existing on the date hereof, customary provisions in leases restricting the assignment or sublet thereof.
SECTION 8.2 Restrictions on Debt. With respect to the Borrowers and their Restricted Subsidiaries, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Debt other than:
Documents;
respect of such Debt, in each case, incurred from and after the Closing Date; provided that the aggregate principal amount of all such Debt shall not exceed $1,000,000 at any time outstanding;
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(iii) was not incurred in connection with, or in contemplation of, such Permitted Acquisition;
SECTION 8.3 Restrictions on Liens. With respect to the Borrowers and their Restricted Subsidiaries, create or incur or suffer to be created or incurred or to exist any Lien upon any of its Property, or upon the income or profits therefrom; provided that, the Borrower Parties may create or incur or suffer to be created or incurred or to exist the following Liens (collectively, the “Permitted Liens”):
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Disposition;
Acquisition that secure Debt permitted by Section 8.2(u);
SECTION 8.4 Mergers and Acquisitions. Become a party to any merger, amalgamation or consolidation, without the prior written consent of the Agent, other than (a) any merger, amalgamation or consolidation in connection with an Investment permitted under Section
8.7 and the surviving entity of which is a Borrower Party and (b) any merger, amalgamation or consolidation among Borrower Parties or between a Borrower Party and any Subsidiary that is not a Borrower Party so long as the surviving entity of which is a Borrower Party.
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SECTION 8.6 Restricted Payments. Make any Restricted Payment other
than:
or (ii) any Subsidiary of any Borrower Party to any Borrower Party;
SECTION 8.7 Restricted Investments. (a) Purchase or acquire, or make any commitment for, the issuance of any Equity Interest or any Debt or obligations or other securities
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of, or any interest in, any Person, (b) make or commit to make any Acquisition, including by way of merger, consolidation or other combination, or (c) make or commit to make any advance, loan, extension of credit or capital contribution to, or assume the Debt of, purchase or acquire any other Debt or interest in, or make any other investment in, any Person including any Affiliate of Borrower or any Subsidiary (the items described in clauses (a), (b) and (c) are referred to, as “Investments”), except for:
course of business;
Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Borrower Party or any of its Subsidiaries as a result of insolvency proceedings involving an account debtor or upon the foreclosure or enforcement of any Lien in favor of a Borrower Party or its Subsidiaries;
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SECTION 8.8 Dispositions. Make any Disposition other than Permitted Dispositions.
SECTION 8.9 [Reserved.]
SECTION 8.10 Changes in Organizational Documents. Amend, modify or alter, or permit to be amended, modified or altered, or enter into any new agreement or document with respect to, any of Borrower Parties’ Organization Documents or any agreement entered into by such Person with respect to its equity securities, nor shall Borrower enter into, or permit any of its Restricted Subsidiaries to enter into, any new agreement with respect to its equity securities, in each case to the extent the same (i) would reasonably be expected to have a Material Adverse Effect, (ii) would cause or result in a Default or Event of Default hereunder, or (iii) is materially adverse to the interests of the Agent or any Lender. For the avoidance of doubt, no Borrower Party shall be permitted to change its name without providing not less than fifteen (15) days’ prior written notice to the Agent and entering into such documents or agreements reasonably requested by the Agent to ensure that there is no loss of perfection in respect of any Liens in favor of the Agent that may result from such name change.
SECTION 8.11 Financing Transactions. Except as otherwise provided herein, enter into or amend, restate, extend, supplement or otherwise modify, as applicable, any debtor-in-possession, rescue, priming, foreclosure or similar financing by any Borrower Party.
SECTION 8.12 Sale and Leaseback Transactions. Enter into any Sale and Leaseback without the prior written consent of Agent.
SECTION 8.13 Change in Nature of Business. Engage in any line of business substantially different from those lines of business conducted by the Loan Parties and their Subsidiaries on the date hereof or any business substantially related or incidental, complementary, corollary, synergistic or ancillary thereto.
SECTION 8.14 Modifications of Debt and Certain Other Agreements; Etc.
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Notwithstanding anything to the contrary in this Section 8.14, and subject to compliance with Section 8.19, nothing herein shall be deemed to prohibit any Permitted Pelorus Refinancing Debt.
SECTION 8.15 Limitations on Negative Pledges. Enter into, incur or permit to exist, directly or indirectly, any agreement, instrument, deed, lease or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Borrower Party to create, incur or permit to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, or that requires the grant of any security for an obligation if security is granted for another obligation, except the following: (i) the provisions of this Agreement and the other Loan Documents, (ii) restrictions or conditions contained in contracts, leases and documents governing Financing Debt in existence as of the Closing Date, (iii) restrictions or conditions imposed by any agreement relating to Debt secured by a Lien solely to the extent permitted under this Agreement or any Loan Document, if such restrictions or conditions apply only to the Property securing such Debt, (iv) any customary restrictions and conditions contained in agreements relating to the sale or other disposition of Property or of a Subsidiary pending such sale or other disposition; provided that such restrictions and conditions apply only to the Property or Subsidiary to be sold or disposed of and such sale or disposition is permitted hereunder, (v) restrictions under documents evidencing or governing (A) the Pelorus Facility and (B) subject to compliance with Section 8.19, Permitted Pelorus Refinancing Debt, and (vi) customary provisions in leases restricting the assignment or sublet thereof.
SECTION 8.16 Restrictions on Guarantors and Non-Loan Parties.
(i) the ownership of the Equity Interests of their Subsidiaries and activities reasonably incidental thereto, (ii) the corporate actions required to maintain such entity’s existence and (iii) the execution and delivery of the Loan Documents to which Parent and US Parent are a party and the performance of their obligations thereunder.
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SECTION 8.17 Restrictions on Pelorus Borrowers. At any time prior to the joinder of the Pelorus Borrowers as Borrowers hereunder and the grant of a first lien security interest (subject to Permitted Liens) in the assets securing the Pelorus Facility to the Agent, for the benefit of the Lenders, pursuant to Section 7.12(a), (a) the Pelorus Borrowers shall not incur any Financing Debt, (b) the Pelorus Borrowers shall not transfer, sell or otherwise dispose of the Maplewood Assets (as defined in the Pelorus Facility) or the Lodi Assets (as defined in the Pelorus Facility) unless such assets are transferred to a Borrower Party, and (c) no event of default (beyond any applicable grace or cure period stated in the Pelorus Facility) shall occur under the Pelorus Facility (as in effect on the Closing Date or as amended in accordance with the terms of this Agreement).
SECTION 8.18 Minimum Liquidity. Permit the balance of unrestricted (other than any restriction (i) in favor of Agent resulting from the Loan Documents, (ii) by operation of law, or (iii) in favor of the applicable depository institutions pursuant to any depository agreements) cash of the Borrowers and their Restricted Subsidiaries on a consolidated and combined basis deposited in Controlled Accounts to be less than Eight Million Five Hundred Thousand Dollars ($8,500,000) as of the last day of each fiscal month.
SECTION 8.19 Right of [***]. Permit any [***] without [***]. The Lenders shall also be permitted to exercise [***] following the occurrence and during the continuance of (i) any default under [***] (beyond any applicable grace or cure period) consisting of (A) the failure to make any required payment thereunder or (B) violation of any financial or other material covenant under the [***] and which in the case of this clause (B) is not cured or waived for more than thirty (30) consecutive calendar days and (ii) an exercise of secured creditor rights and remedies by the lenders under the [***] following the occurrence of an event of default thereunder (each, a “[***]”). The Borrower Representative shall provide the Agent (i) advance notice of [***] and (ii) notice of any [***]. At any time prior [***], the Agent shall have the right, but not the obligation, to [***]. If prior [***] the Agent, on behalf of some or all of the Lenders, [***]. If the Agent, the applicable Lenders, the Borrowers and [***] come to an agreement [***] the parties shall enter into an [***], and [***]. If (i) the Agent, on behalf of the Lenders, notifies the Borrower Representative that the Agent will not [***], then the Agent, or (ii) following [***] the Borrowers, [***], the Agent and the applicable Lenders fail to reach an agreement [***] for any reason, or (iii) after [***] the Borrowers, [***], the Agent and the applicable Lenders fail to enter into [***] or (B) [***] Lenders cease to negotiate or act in good faith in respect [***], then in each case of the preceding clauses (i), (ii) and (iii), [***] may negotiate, enter into and [***] in accordance with Section 8.2(j); provided [***] and the Agent and the Lenders shall have the right [***] provided, further (i) that the Agent shall inform the Borrower Representative not later than five (5) Business Days after its receipt [***] and the failure by the Agent to respond [***] within such five (5) Business Day period shall be deemed to constitute an election by the Lenders not to exercise [***], and (ii) [***] shall only be available to the Agent and the Lenders so long as the Lenders elected to exercise [***].
ARTICLE IX. EVENTS OF DEFAULT
SECTION 9.1 Events of Default. If any of the following events (“Events of Default”) shall occur, effective as of the earlier of: (i) the date the Loan Parties have knowledge of such default and (ii) the date written notice of such default is given by Agent to any Loan Party:
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$2,500,000.
Then, and in any such event, the Agent may declare the outstanding principal balance of the Term Loans, all interest thereon and all other outstanding Obligations or amounts payable under this Agreement or any other Loan Document to be forthwith due and payable; provided however, that in the case of any Default pursuant to Subsection (j) of this Section 9.1, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrowers.
SECTION 9.2 Remedies. In addition to the rights of the Agent and Lenders in the last paragraph of Section 9.1, upon the occurrence and during the continuance of an Event of Default, the Agent, acting on behalf of the Lenders, will have immediate rights to (i) foreclose on the Collateral (including the Pledged Equity) without any approval or additional action of any Loan Party; (ii) enforce each of the guaranties made by the Guarantors hereunder; (iii) enforce its rights for a Third Party Sale; (iv) seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of its remedies, with respect to such appointment without prior notice or hearing as to such appointment; (v) exercise exclusive control over all Controlled Accounts, including requiring the Borrower Parties’ to immediately direct each depository bank to comply with the DACAs and cease complying with withdrawal or entitlement orders and all other directions concerning the Controlled Accounts originated by any Borrower Party pursuant to Section 7.10 hereof; and (vi) exercise any and all of its other rights and remedies under applicable law, hereunder and under the other Loan Documents. The Borrower Parties shall cause their Restricted Subsidiaries to cooperate with Agent and promptly provide such documentation, access, and other assistance as Agent may request in order to effectuate the foregoing or enforce its rights hereunder.
ARTICLE X.
THE BORROWER REPRESENTATIVE.
SECTION 10.1 Appointment; Nature of Relationship. TerrAscend USA is hereby appointed by each of the Borrowers as its contractual representative (herein referred to as the “Borrower Representative”) hereunder and under each other Loan Document, and each of the Borrowers irrevocably authorizes the Borrower Representative to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents. The Borrower Representative agrees to act as such contractual
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representative upon the express conditions contained in this Article X. Additionally, the Borrowers hereby appoint the Borrower Representative as their agent to receive all of the balance of the proceeds of the Term Loans (if any), at which time the Borrower Representative shall promptly disburse such Term Loans to the appropriate Borrower(s). The Agent and the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Borrower Representative or any Borrower for any action taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section 10.1.
SECTION 10.2 Powers. The Borrower Representative shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.
SECTION 10.3 Employment of Agents. The Borrower Representative may execute any of its duties as the Borrower Representative hereunder and under any other Loan Document by or through authorized officers.
SECTION 10.4 Notices. Each Borrower shall immediately notify the Borrower Representative of the occurrence of any Default or Event of Default hereunder referring to this Agreement describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Borrower Representative receives such a notice, the Borrower Representative shall give prompt notice thereof to the Agent and the Lenders.
SECTION 10.5 Successor Borrower Representative. Upon the prior written consent of the Agent, the Borrower Representative may resign at any time, such resignation to be effective upon the appointment of a successor Borrower Representative. The Agent shall give prompt written notice of such resignation to the Lenders.
SECTION 10.6 Execution of Loan Documents. The Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute and deliver to the Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including, without limitation, the Compliance Certificates. Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.
ARTICLE XI. MISCELLANEOUS
SECTION 11.1 Survival of Representations and Warranties. All representations and warranties in each Loan Document shall survive the delivery of the Note and the making of the Term Loan, and shall continue after the repayment of the Note and the Maturity Date until all Obligations are paid in full (other than inchoate obligations for indemnification or unasserted claims for reimbursement), and any investigation at any time made by or on behalf of
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the Agent shall not diminish the Lenders’ right to rely thereon.
SECTION 11.2 Amendments, Etc. No amendment or waiver of any provision of this Agreement or the Note, nor consent to any departure by the Borrowers therefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, the Required Lenders and each Borrower, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall:
(B) the priority of the Liens securing the Obligations to the Liens securing any other Debt, in each case, without the written consent of each Lender;
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In addition, notwithstanding anything in this Section to the contrary, if the Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical nature, in each case, in any provision of the Loan Documents, then the Agent and the Borrowers shall be permitted to amend such provision, and, in each case, such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders to the Agent within ten (10) Business Days following receipt of notice thereof.
SECTION 11.3 Notices, Etc. All notices and other communications provided for hereunder shall be in writing and sent by (a) a recognized national overnight delivery service and shall be effective when actually delivered to the addresses listed below or (b) electronic mail and shall be effective when confirmation of such electronic mail is received or such electronic mail is delivered to the respective e-mail address(es) below and no bounce-back or error message is received by the sender thereof:
If to any Borrower
or any Loan Party: c/o TerrAscend USA, Inc.
[***]
Attention: [***]
Email: [***]
with a copy (which shall not constitute
notice) to: Xxxxxxxxx Xxxxxxx, LLP
[***]
Attention: [***]
Email: [***]
If to the Agent: FG Agency Lending LLC
[***]
Attention: [***]
Email: [***]
with a copy (which shall not constitute
notice) to: Xxxxx Xxxx LLP [***]
Attention: [***]
Email: [***]
or as to the Borrowers, the Lenders, or Agent at such other address as shall be designated by such party in a written notice to the other parties. For the avoidance of doubt, information required to be furnished to the Agent pursuant to Article VII hereof shall not require a copy to be delivered by Borrowers to Agent’s counsel.
SECTION 11.4 No Waiver; Remedies. No failure on the part of the Agent or the Lenders to exercise, and no delay in exercising, any right under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any
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other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 11.5 Costs and Expenses. The Borrowers agree to pay or reimburse upon demand, all reasonable and documented out-of-pocket costs, fees and expenses of the Agent incurred in connection with the investigation, development, preparation, negotiation, syndication, execution, interpretation or administration of this Agreement, any modification of any term of or termination of, any Loan Document or any other document delivered in connection with the transactions contemplated therein, including without limitation, the Agent Fee payable to Agent and any and all reasonable and documented out-of-pocket legal fees, costs, and expenses incurred by Agent in connection with this Agreement; [***]. The payment or reimbursement of such legal fees, costs, and expenses incurred on or before the Closing Date, together with the Estimated Legal Fees, shall be paid to counsel for the Agent, out of the loan proceeds on the Closing Date and such fees shall be deducted from the amount Lenders are obligated to fund to the Borrowers hereunder. The Borrowers agree to pay or reimburse upon demand, all reasonable and documented out-of-pocket costs, fees, and expenses, if any (including, without limitation, reasonable and documented out-of-pocket counsel fees, costs, and expenses (limited to the fees, costs, client charges and expenses of (i) one firm of lead counsel for the Agent and the Lenders, taken as a whole, (ii) one local counsel in each relevant jurisdiction (and, in the case of an actual or potential conflict of interest, one additional local counsel in each relevant jurisdiction) for the Agent and the Lenders, taken as a whole), incurred by the Agent and Lenders in connection with the monitoring and enforcement (whether through negotiations, legal proceedings or otherwise) of the Loan Documents and the other documents to be delivered under the Loan Documents, including, without limitation, for any amendments, waivers, collection of principal, interest, fees and any other amounts owed hereunder, or other enforcement of rights hereunder including under this Section 11.5. The Borrowers shall be responsible for the payment of all broker fees, including, without limitation, any success fees and unpaid retainers.
SECTION 11.6 Indemnification. The Borrowers shall indemnify the Agent each Lender and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs (including settlement costs), disbursements and reasonable and documented out-of-pocket fees and expenses (including the reasonable and documented out-of-pocket fees, charges and disbursements of any counsel for any Indemnitee (limited to the fees, costs, client charges and expenses of (i) one firm of lead counsel for the Agent and the Lenders, taken as a whole, and (ii) one local counsel in each relevant jurisdiction (and, in the case of an actual or potential conflict of interest, one additional local counsel in each relevant jurisdiction) for the Agent and the Lenders, taken as a whole)), joint or several, of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted or awarded against any Indemnitee in any way relating to or arising out of or in connection with or by reason of (i) any actual or prospective claim, litigation, investigation or proceeding in any way relating to, arising out of, in connection with or by reason of any of the following, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, litigation or proceeding): (x) the execution, delivery, enforcement, performance or administration of any Loan Document or any other document delivered in connection with the transactions contemplated thereby or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) or the consummation of the
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transactions contemplated thereby or (y) any Commitment, any credit extension or the use or proposed use of the proceeds thereof; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, fees and expenses (A) are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee, (B) result from a claim brought by the Borrowers or any other Loan Party against an Indemnitee for a material breach in bad faith of such Indemnitee’s funding obligations hereunder, if the Borrowers or such Loan Party has obtained a final and non-appealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (C) any dispute solely among Indemnitees (other than any claims against an Indemnitee in its capacity or in fulfilling its role as an agent or arranger or any similar role hereunder or under any other Loan Document and other than any claims arising out of any act or omission of any Loan Party or any of their Affiliates); or (ii) any actual or alleged presence or release of Materials of Environmental Concern on or from any Real Property currently or formerly owned or operated by the Borrower Parties, or any Environmental Liability related in any way to the Borrower Parties, in all cases; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, fees and expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee. This Section 11.6 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. Notwithstanding anything contained in this Agreement to the contrary, the Loan Parties’ liability and obligations with respect to any indemnified liability arising out of any Environmental Law in respect of any Real Property shall be released on the date which is the three
(3) year anniversary of the date on which the earliest of the following occurs: (i) the payment in full of the Obligations (other than inchoate obligations for indemnification or unasserted claims for reimbursement), or (ii) Agent or its nominee or assignee has exercised it foreclosure rights under this Agreement; provided that the Agent has received a Phase I environmental site assessment prepared on Agent’s behalf by environmental professionals selected by the Loan Parties and approved by Agent in its reasonable discretion, at the sole cost of the Loan Parties, that indicates that the applicable Real Property and the Loan Parties’ operations are free from any circumstance, condition, Materials of Environmental Concern or violation of Environmental Law that constitutes a “recognized environmental condition” (as that term is defined in the ASTM standard practice for Phase I environmental site assessments) that could reasonably be expected to have a Material Adverse Effect and was not disclosed to Agent prior to the Closing Date.
SECTION 11.7 Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, the Agent, on behalf of the Lenders, is hereby authorized at any time and from time to time, to the fullest extent permitted by Requirements of Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Debt at any time owing by the Lenders to or for the credit or the account of the Borrowers or any other Loan Party against any and all of the obligations of the Borrowers now or hereafter existing under any Loan Document, whether or not the Agent or Lenders shall have made any demand under the Note and although such obligations may be unmatured. The Agent, on behalf of the Lenders, agree to promptly notify the Borrowers after any such set-off and application made by such Lenders, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Lenders under this Section are in addition to other rights
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and remedies (including, without limitation, other rights of set-off) which such Lenders may have.
SECTION 11.8 Binding Effect. This Agreement shall become effective when it shall have been executed by each Borrower, the Agent and the Lenders and thereafter shall be binding upon and inure to the benefit of the Borrowers, the Agent and the Lenders and their respective permitted successors and assigns.
SECTION 11.9 Assignments and Participations.
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SECTION 11.10 Limitation on Agreements. All agreements among the Borrowers, the Agent and the Lenders, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of demand being made in respect of an amount due under any Loan Document or otherwise, shall the amount paid, or agreed to be paid, to the Lenders for the use, forbearance, or detention of the money to be loaned under the Note or any other Loan Document or otherwise or for the payment or performance of any covenant or obligation contained herein or in any other Loan Document exceed the Highest Lawful Rate. If, as a result of any circumstance whatsoever, fulfillment of or compliance with any provision hereof or of any of such documents at the time performance of such provision shall be due or at any other time shall involve exceeding the amount permitted to be contracted for, taken, reserved, charged or received by the Lenders under applicable usury or similar law, then, ipso facto, the obligation to be fulfilled or complied with shall be reduced (firstly by reducing the stated interest rate and thereafter, if and to the extent required, by reducing any other amount comprising interest) to the limit prescribed by such applicable usury or similar law, and if, from any such circumstance, the Lenders shall ever receive interest or anything which might be deemed interest under applicable law which would exceed the Highest Lawful Rate, such amount which would be excessive interest shall be applied to the reduction of the principal amount owing on account of the Note or the amounts owing on other obligations of the Borrowers to the Lenders under any Loan Document and not to the payment of interest, or if such excessive interest exceeds the unpaid principal balance of the Note and the amounts owing on other obligations of the Borrowers to the Lenders under any Loan Document, as the case may be, such excess shall be promptly refunded in cash to the Borrowers. All sums paid or agreed to be paid to the Lenders for the use, forbearance, or detention of the indebtedness of the Borrowers to the Lenders shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full term of such indebtedness until payment in full of the principal (including the period of any renewal or extension thereof) so that the interest on account of such indebtedness shall not exceed the Highest Lawful Rate. Notwithstanding anything to the contrary contained in any Loan Document, it is understood and agreed that if at any time the rate of interest which accrues on the outstanding principal balance of the Note shall exceed the Highest Lawful Rate, the rate of interest which accrues on the outstanding principal balance of the Note shall be limited to the Highest Lawful Rate, but any subsequent reductions in the rate of interest which accrues on the outstanding principal balance of the Note shall not reduce the rate of interest which accrues on the outstanding principal balance of such Note below the Highest Lawful Rate until the total amount of interest accrued on the outstanding principal balance of the Note, taken in the aggregate, equals the amount of interest which would have accrued if such interest rate had at all times been in effect and not been reduced. In the event that any rate of interest under the Note or any Loan Document is reduced due to the effect of this Section 11.10 and there is a subsequent increase in the Highest Lawful Rate, such interest rate shall, automatically without any action of the Borrowers or Lenders, be increased to the then applicable Highest Lawful Rate; provided that the interest rate shall not exceed the rate set forth in Section 2.3. The terms and provisions of this Section 11.10 shall control and supersede every other provision of all Loan Documents.
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SECTION 11.11 SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE BORROWERS, THE AGENT AND THE LENDERS IRREVOCABLY AND UNCONDITIONALLY:
SECTION 11.12 Severability. In case any one or more of the provisions contained in any Loan Document to which the Borrowers is a party or in any instrument contemplated thereby, or any application thereof, shall be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained therein, and any other
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application thereof, shall not in any way be affected or impaired thereby.
SECTION 11.13 Governing Law. This Agreement and the Note shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed entirely within such state.
SECTION 11.14 WAIVER OF DEFENSE OF ILLEGALITY. EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES ANY DEFENSE BASED ON FEDERAL LAW OR THAT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE VOID AS AGAINST PUBLIC POLICY OR BASED ON ILLEGALITY UNDER FEDERAL LAW, INCLUDING WITHOUT LIMITATION ANY FEDERAL CANNABIS LAWS. EACH PARTY HERETO ACKNOWLEDGES THAT EACH OF CALIFORNIA, MICHIGAN AND PENNSYLVANIA HAS ENACTED LEGISLATION REGARDING THE LEGAL USE OF CANNABIS, PARTICULARLY MARIJUANA, WHICH MAY BE IN CONFLICT WITH FEDERAL LAWS. EACH PARTY EXPRESSLY WAIVES THE RIGHT TO PRESENT ANY DEFENSE RELATED TO THE FEDERAL ILLEGALITY OF CANNABIS AND AGREES THAT SUCH DEFENSE SHALL NOT BE ASSERTED, AND WILL NOT APPLY, IN ANY DISPUTE OR CLAIM ARISING OUT OF THIS AGREEMENT.
SECTION 11.15 Execution in Counterparts; Electronic Signatures.
SECTION 11.16 Confidentiality.
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11.9 so long as such assignee or participant (or prospective assignee or participant) has been informed of the confidential nature of such information and instructed to keep such information confidential on substantially the same terms as this Section 11.16; (iv) to the extent required by any Requirement of Law or judicial process or as otherwise requested by any Governmental Authority, provided that the Agent shall use commercially reasonable efforts to give the applicable Loan Party written notice prior to disclosing the information to the extent permitted by such requirement; (v) in connection with any litigation to which the Agent or any Lender is a party (so long as the Agent or Lender provides the Borrower Representative with prompt notice thereof to the extent permitted by applicable law); (vi) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; or
(vii) with the written consent of the Borrower Representative.
ARTICLE XII.
RIGHTS AND DUTIES OF AGENT.
SECTION 12.2 Agent. (i) is acting solely on behalf of the Lenders (except to
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the limited extent provided in Section 11.9(f) with respect to the Register), with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Agent”, “agent”, and similar terms in any Loan Document to refer to Agent, which terms are used for title purposes only, (ii) is not assuming and shall not have any actual or implied obligations, functions, responsibilities, duties, under any Loan Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender or any other Person, and each Lender, by accepting the benefits of the Loan Documents, hereby waives and agrees not to assert any claim against Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (i) and (ii) above.
SECTION 12.3 Rights as a Lender. The Persons serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it was not the Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Persons serving as Agent hereunder in each of the Agent’s individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Loan Parties or any Subsidiary or other Affiliate thereof as if such Person were not the Agent hereunder and without any duty to account therefor to the Lenders. FG Agency Lending LLC (and any successor acting as Agent or any sub-agent) and its Affiliates may accept fees and other consideration from the Borrower or any Affiliate of the Borrower for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.
SECTION 12.4 Loan Information.
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SECTION 12.5 Enforcement of Loan. Except as specifically provided in this Agreement, it is understood and agreed that Agent may, in its sole discretion and without prior notice to or consent of Lenders, (i) agree to the modification, waiver or release of any term or provision of the Loan Documents, (ii) give or withhold consents or approvals to any actions or failures to act by Borrower, (iii) exercise or refrain from exercising, or waive, any rights or powers or take or refrain from taking any actions which may be vested in Agent or which Agent may be entitled to take or assert under the Loan Documents, and (iv) take such other and further action as Agent may deem necessary for the effective administration of the Term Loan; provided, however, that without the prior written consent of Required Lenders, no such amendment, waiver or consent shall:
Date;
material term or provision of the Loan Documents or give or withhold consents or approval to any actions or failures to act by Borrower;
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thereunder; or
Notwithstanding the foregoing, (i) any fee letter between the Agent or any of its Affiliates, on the one hand, and one or more Loan Parties, on the other hand, may be amended by the parties thereto and (ii) the Incremental Amendment shall be effective to amend this Agreement as contemplated by Section 2.1(c) if executed by the Borrowers, the other Loan Parties party thereto, the applicable Lenders providing an Incremental Commitment and the Agent.
SECTION 12.6 Nature of Duties of the Agent. The Agent shall have no duties or responsibilities to Lenders except as expressly set forth in this Agreement. The Agent’s duties hereunder shall be mechanical and administrative in nature. The Agent shall not have by reason hereof a fiduciary relationship with respect to Xxxxxxx. The Agent agrees to be bound by Xxxxxxx’ determinations made in connection with the Loan Documents so long as such determinations are made in good faith and in the absence of willful misconduct. Unless indemnified to the satisfaction of the Agent against loss, cost, liability, and expense, the Agent shall be under no duty to enforce any rights, remedies, powers, or privileges with respect to any enforcement of the obligations of the Borrowers under the Loan Documents and shall not be compelled to do any act hereunder or thereunder or to take any action toward the exercise or enforcement of the powers created by this Agreement or any of the Loan Documents, or to prosecute or defend any suit in respect hereof or thereof. Agent shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of their Affiliates that is communicated to or obtained by the Person serving as the Agent or any of its Affiliates in any capacity. The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 9.2 and 11.2), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and non-appealable judgment. The Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Agent in writing by a Loan Party or a Lender. In the event that the Agent receives such a notice of the occurrence of a Default or Event of Default, the Agent shall take such action with respect to such Default or Event of Default as shall reasonably be directed by the Required Lenders, provided that, unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interest of the Lenders.
SECTION 12.7 Standard of Care. In making and handling the Term Loan, the Agent will exercise the same care as a commercially reasonable agent would exercise, but the Agent shall have no further responsibility to Lenders except as expressly provided herein. Further, the Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any recital, statement, warranty or representation (whether written or oral) made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the value, validity,
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enforceability, effectiveness, sufficiency or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent, (vi) any litigation or collection proceeding (or to initiate or conduct any such litigation or proceeding) under any Loan Document unless requested by the Required Lenders in writing and it receives indemnification satisfactory to it from the Lenders or (vii) the value or rating of any Collateral.
SECTION 12.8 Indemnification of the Agent by Lenders. To the extent that the Agent and its Related Parties are not reimbursed and indemnified by Xxxxxxxx, and whether or not the Agent or its Related Parties has made demand on the Borrowers for the same, the Lenders will, within five days of written demand by the Agent or its Related Parties, reimburse the Agent and its Related Parties for and indemnify the Agent and its Related Parties from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, without limitation, client charges and expenses of counsel or any other advisor to the Agent or its Related Parties), advances or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent or its Related Parties in any way relating to or arising out of this Agreement or any of the other Loan Documents or any action taken or omitted by the Agent or its Related Parties under this Agreement or any of the other Loan Documents, in proportion to each Lender’s pro rata share, including, without limitation, advances and disbursements made; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements for which there has been a final non-appealable judicial determination that such liability resulted from the Agent’s or its Related Parties’ gross negligence or willful misconduct. The obligations of the Lenders under this Section 12.8 shall survive the payment in full of the Term Loan and the termination of this Agreement.
SECTION 12.9 Erroneous Payments.
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For the avoidance of doubt, the failure to deliver a notice to Agent pursuant to this Section 12.9(b) shall not have any effect on a Payment Recipient’s obligations pursuant to Section 12.9(a) or on whether or not an Erroneous Payment has been made.
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SECTION 12.10 Merger or Consolidation. Any corporation or association into which FG Agency Lending LLC may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer all or substantially all of its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which FG Agency Lending LLC is a party, will be and become the successor Agent under this Agreement and will have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution or filing of any instrument or paper or the performance of any further act.
SECTION 12.11 Delegation of Duties.
SECTION 12.12 Resignation of Agent.
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SECTION 12.13 Non-Reliance on Agent and Other Lenders. Each Lender acknowledges and agrees that it has, independently and without reliance upon the Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges and agrees that it will, independently and without reliance upon the Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. Except for notices, reports, and other documents and information expressly required to be furnished to the Lenders by the Agent hereunder and for other information in the Agent’s possession which has been requested by a Lender and for which such Xxxxxx pays the Agent’s expenses in connection therewith, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition, or business of any Loan Party or any of its Affiliates that may come into the possession of the Agent or any of its Affiliates. Each Lender represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility and certain other facilities set forth herein and (ii) it is entering into this Agreement as a Lender for the purpose of making, acquiring or holding commercial loans set forth herein as may be applicable to such Lender, and not for the purpose of purchasing, acquiring or holding any other type of
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financial instrument, and each Xxxxxx agrees not to assert a claim in contravention of the foregoing. Each Lender represents and warrants that it is sophisticated with respect to decisions to make, acquire or hold commercial loans, as may be applicable to such Lender, and either it, or the Person exercising discretion in making its decision to make, acquire or hold such commercial loans, is experienced in making, acquiring or holding such commercial loans.
SECTION 12.14 Agent May File Proofs of Xxxxx.Xx case of the pendency of any proceeding under the Bankruptcy Code or any other judicial proceeding relative to any Loan Party, the Agent (irrespective of whether the principal of the Term Loans shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Agent shall have made any demand on the Loan Parties) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Term Loans, and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Agent and their respective agents and counsel) and all other amounts due the Lenders and the Agent in such judicial proceeding; and
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by the Lenders to make such payments to the Agent and, if the Agent shall consent to the making of such payments directly to the Lenders, to pay to the Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agent and its agents and counsel, and any other amounts due the Agent.
Nothing herein contained shall be deemed to authorize the Agent to authorize or consent to or accept or adopt on behalf of the Lenders any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of the Lenders to authorize the Agent to vote in respect of the claim of the Lenders or in any such proceeding.
SECTION 12.15 Appointment of Collateral Agent. The Required Lenders may in their sole and absolute discretion, by notice in writing to the Loan Parties, appoint a Person to serve as collateral agent hereunder and under the Security Documents. The Loan Parties will cooperate with the Lenders and such Person, and execute and deliver any documents necessary, to effectuate such appointment.
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SECTION 12.16 Force Majeure. The Agent shall not be (i) required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder or under any other Loan Document or (ii) responsible or liable for any failure or delay in the performance of its obligations hereunder or under any other Loan Document arising out of or caused, directly or indirectly, by circumstances beyond its control, including without limitation, any act or provision of any present or future law or regulation or governmental authority; acts of God; earthquakes; fires; floods; wars; terrorism; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility.
ARTICLE XIII. GUARANTY.
SECTION 13.1 Guaranty of Obligations. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, that the Obligations will be performed and paid in full in cash when due and payable, whether at the stated or accelerated maturity thereof or otherwise, this guaranty being a guaranty of payment and not of collectability and being absolute and in no way conditional or contingent. In the event any part of the Obligations shall not have been so paid in full when due and payable, each Guarantor will, immediately upon notice by the Agent or, without notice, immediately upon the occurrence of a bankruptcy Event of Default, pay or cause to be paid to the Agent for the account of each Lender in accordance with the Lenders’ respective interests therein the amount of such Obligations which are then due and payable and unpaid. The obligations of each Guarantor hereunder shall not be affected by the invalidity, unenforceability or irrecoverability of any of the Obligations as against the Borrower, any other Loan Party or any other Person. For purposes of this Article XIII, the Obligations shall be due and payable when and as the same shall be due and payable under the terms herein or any other Loan Document notwithstanding the fact that the collection or enforcement thereof may be stayed or enjoined under the Bankruptcy Code or other applicable law.
SECTION 13.2 Continuing Obligation. Each Guarantor acknowledges that the Lenders have entered into this Agreement in reliance on this Article XIII being a continuing irrevocable agreement, and such Guarantor agrees that its guaranty may not be revoked in whole or in part. The obligations of the Guarantors hereunder shall terminate when all of the Obligations have been indefeasibly paid in full in cash and discharged; provided, however, that:
then the Guarantors shall remain liable under this Agreement for the amounts so repaid or property so returned or the amounts for which the Lenders became liable (such amounts being
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deemed part of the Obligations) to the same extent as if such amounts or property had never been received by the Lenders, notwithstanding any termination hereof or the cancellation of any instrument or agreement evidencing any of the Obligations. Not later than five days after receipt of notice from such the Agent, the Guarantors shall pay to the Agent an amount equal to the amount of such repayment or return for which the Lenders have so become liable. Payments hereunder by a Guarantor may be required by the Agent on any number of occasions.
SECTION 13.3 Waivers with Respect to Obligations. Except to the extent expressly required herein or any other Loan Document, each Guarantor waives, to the fullest extent permitted by the provisions of applicable law, all of the following (including all defenses, counterclaims and other rights of any nature based upon any of the following):
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Each Guarantor represents that it has obtained the advice of counsel as to the extent to which suretyship and other defenses may be available to it with respect to its obligations hereunder in the absence of the waivers contained in this Section 13.3.
No delay or omission on the part of the Agent or Lenders in exercising any right under any other Loan Document or under any other guaranty of the Obligations shall operate as a waiver or relinquishment of such right. No action which the Agent or the Lenders or the Borrowers or any Guarantor may take or refrain from taking with respect to the Obligations shall affect the provisions of this Article XIII or the obligations of each Guarantor hereunder. None of the Agent’s or Lenders’ rights shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Borrowers or any Guarantor, or by any noncompliance by the Borrowers or any Guarantor with any Loan Document, regardless of any knowledge thereof which the Agent or Lenders may have or otherwise be charged with.
SECTION 13.4 Agent’s Power to Waive, etc. Each Guarantor grants to the Agent and the Lenders full power in its discretion, without notice to or consent of such Guarantor, such notice and consent being expressly waived to the fullest extent permitted by applicable law, and without in any way affecting the liability of such Guarantor under its guaranty hereunder:
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SECTION 13.5 Information Regarding the Borrower, etc. Each Guarantor has made such investigation as it deems desirable of the risks undertaken by it in entering into this Agreement and is fully satisfied that it understands all such risks. Each Guarantor waives any obligation which may now or hereafter exist on the part of the Agent or the Lenders to inform such Guarantor of the risks being undertaken by entering into this Agreement or of any changes in such risks and, from and after the date hereof, each Guarantor undertakes to keep informed of such risks and any changes therein. Each Guarantor expressly waives any duty which may now or hereafter exist on the part of the Agent or the Lenders to disclose to such Guarantor any matter related to the business, operations, character, collateral, credit, condition (financial or otherwise), income or prospects of the Borrowers and their Affiliates or their properties or management, whether now or hereafter known by the Agent or the Lenders. Each Guarantor represents, warrants and agrees such Guarantor assumes sole responsibility for obtaining from the Borrowers all information concerning this Agreement and all other Loan Documents and all other information as to the Borrowers and their Affiliates or their properties or management as such Guarantor deems necessary or desirable.
SECTION 13.6 Certain Guarantor Representations. Each Guarantor represents that:
its benefit;
from the Lenders for this guaranty;
of its business;
connection therewith as such debts mature; and
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SECTION 13.7 Subrogation. Each Guarantor agrees that, until the Obligations are indefeasibly paid in full, it will not exercise any right of reimbursement, subrogation, contribution, offset or other claims against the Borrowers or any other Loan Party arising by contract or operation of law in connection with any payment made or required to be made by such Guarantor under this Agreement. After the payment in full of the Obligations, each Guarantor shall be entitled to exercise against the Borrowers all such rights of reimbursement, subrogation, contribution and offset, and all such other claims, to the fullest extent permitted by law.
SECTION 13.8 Subordination. Each Guarantor covenants and agrees that all Debt, claims and liabilities now or hereafter owing by the Borrower Parties to such Guarantor whether arising hereunder or otherwise, including any obligations between the Borrower Parties, are subordinated to the prior payment in full of the Obligations and are so subordinated as a claim against the Borrowers or any of their assets, whether such claim be in the ordinary course of business or in the event of voluntary or involuntary liquidation, dissolution, insolvency or bankruptcy, so that no payment with respect to any such Debt, claim or liability will be made or received while any Event of Default exists. If, notwithstanding the foregoing, any payment with respect to any such indebtedness, claim or liability is received by any Guarantor in contravention of this Agreement, such payment shall be held in trust for the benefit of the Lenders and promptly turned over to it in the original form received by such Guarantor.
SECTION 13.9 Contribution Among Guarantors. The Guarantors agree that, as among themselves in their capacity as guarantors of the Obligations, the ultimate responsibility for repayment of the Obligations, in the event that the Borrowers fail to pay when due their Obligations, shall be equitably apportioned, to the extent consistent with the Loan Documents, among the respective Guarantors (a) in the proportion that each, in its capacity as a guarantor, has benefited from the extensions of credit to the Borrowers by the Lenders under this Agreement, or (b) if such equitable apportionment cannot reasonably be determined or agreed upon among the affected Guarantors, in proportion to their respective net worths determined on or about the date hereof (or such later date as such Guarantor becomes party hereto). In the event that any Guarantor, in its capacity as a guarantor, pays an amount with respect to the Obligations in excess of its proportionate share as set forth in this Section 13.9, each other Guarantor shall, to the extent consistent with the Loan Documents, make a contribution payment to such Guarantor in an amount such that the aggregate amount paid by each Guarantor reflects its proportionate share of the Obligations. In the event of any default by any Guarantor under this Section 13.9, each other Guarantor will bear, to the extent consistent with the Loan Documents, its proportionate share of the defaulting Guarantor’s obligation under this Section 13.9. This Section 13.9 is intended to set forth only the rights and obligations of the Guarantors among themselves and shall not in any way affect the obligations of any Guarantor to the Lenders under the Loan Documents (which obligations shall at all times constitute the joint and several obligations of all the Guarantors).
SECTION 13.10 Further Assurances. Each Guarantor will, promptly upon the request of Agent from time to time, execute, acknowledge and deliver, and file and record, all such instruments, and take all such action, as the Agent deems necessary or advisable to carry out the intent and purpose of this Article XIII.
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PARENT AND GUARANTOR:
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US PARENT AND GUARANTOR:
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
AGENT:
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By: /s/ Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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Title: [***]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
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Title: [***]
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By: /s/
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
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Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
LENDERS:
[***]
By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
[***]
By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
[***]
By: /s/
Name: [***]
Title: [***]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
[***]
By: /s/
Name: [***]
Title: [***]
Execution Version
SCHEDULES
Schedule 1.1(a) Term Loan Commitment Amount Schedule 1.1(b) Borrowers
Schedule 1.1(c) Excluded Subsidiaries Schedule 1.1(d) Material Cannabis Licenses
Schedule 1.1(e) Description of Specified Acquisition Schedule 5.2(f) Financing Debt
Schedule 6.5(c) Intellectual Property Claims Schedule 6.6(c) Property
Schedule 6.7 Equity Interests and Subsidiaries Schedule 6.13 Insurance
Schedule 6.22 Litigation
Schedule 6.24 Material Contracts
Schedule 6.28 Bank Accounts
Schedule 7.18 Post-Closing Obligations Schedule 8.2 Existing Debt
Schedule 8.3 Existing Liens
Schedule 8.5 Existing Related Party Transactions Schedule 8.7 Existing Investments
Schedule 8.8 Permitted Dispositions
Schedule 1.1(a)
Term Loan Commitment Amount
Lender |
Commitment Amount |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
Total |
$114,000,000.00 |
Lender |
Commitment Amount |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
Total |
$26,000,000.00 |
Schedule 1.1(b) Borrowers
Schedule 1.1 (c)
Excluded Subsidiaries
Schedule 1.1(d)
Material Cannabis Licenses
Schedule 1.1(e)
Description of Specified Acquisition
[***]
Schedule 5.2(f) Financing Debt
Schedule 6.5(c)
Intellectual Property Claims
Schedule 6.6(c)
Property
Schedule 6.7
Equity Interests and Subsidiaries
Schedule 6.13 Insurance
Schedule 6.22
Litigation
Schedule 6.24
Material Contracts
[***]
Schedule 6.28
Bank Accounts
[***]
Schedule 7.18
Post-Closing Obligations
Schedule 8.2 Existing Debt
[***]
Schedule 8.3
Existing Liens
Schedule 8.5
Existing Related Party Transactions
7
Schedule 8.7
Existing Investments
8
Schedule 8.8
Permitted Dispositions
EXHIBIT A
EXHIBIT B
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT, dated as of [ ], 202[_](
this“Agreement”), to the Loan Agreement referred to below is entered into by and among [name of New Entity], a [jurisdiction of formation] [entity type] (the “New Entity”), and FG Agency Lending LLC, a Delaware limited liability company as the agent (the “Agent”) to the lenders (the “Lenders”) from time to time party to that certain Loan Agreement dated as of [ ], 2024 by and among TerrAscend Corp., an Ontario corporation (“Parent”), TerrAscend USA, Inc., a Delaware corporation (“US Parent”), as guarantors, the Subsidiaries of US Parent party thereto from time to time (the “Borrowers”), as borrowers, Agent and the Lenders (as amended, restated, modified, or otherwise supplemented from time to time, the “Loan Agreement”).
WHEREAS, pursuant to Section 7.12(a) of the Loan Agreement, the New Entity is required to become a [Borrower/Guarantor] by, among other things, executing and delivering this Agreement to the Agent; and
WHEREAS, the New Entity has determined that the execution, delivery and performance of this Agreement directly benefit, and are within the corporate purposes and in the best interests of, the New Entity.
NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Definitions. Reference is hereby made to the Loan Agreement for a statement of the terms thereof. Capitalized terms used herein without definition shall have the meanings as ascribed in the Loan Agreement.
SECTION 2. Joinder of New Entity.
provided therein,] [(C) has become party to the Pledge Agreement and shall have all of the obligations of a Pledgor as if it had executed the Pledge Agreement as such a Pledgor, and hereby grants to the Agent, for the ratable benefit of the Agent and the other Secured Parties (as defined therein), a continuing security interest in and Lien upon the Pledged Collateral (as defined therein) on the same terms provided therein], (D) has become a party to the Intercompany Subordinated Demand Promissory Note and shall have all of the obligations of an Affiliate Obligor thereunder as if it had executed such Intercompany Subordinated Demand Promissory Note as such an Affiliate Obligor, and ([E]) shall comply with each other requirement set forth in Section 7.12(a) of the Loan Agreement. The New Entity hereby agrees that from and after the effective date of this Agreement, each reference to a [“Borrower/“Guarantor”] or a “Loan Party” and each reference to the [“Borrowers”/“Guarantors”] or the “Loan Parties” in the Loan Agreement and each other Loan Document shall include the New Entity. The New Entity acknowledges that it has received a copy of the Loan Agreement and each other Loan Document and that it has read and understands the terms thereof.2
SECTION 3. Effectiveness. This Agreement shall become effective upon its execution by the New Entity and the Agent, and receipt by the Agent of the following, in each case in form and substance reasonably satisfactory to the Lenders and the Agent:
2 Note to form: To be conformed as applicable for each applicable New Entity.
2
agreements, instruments and documents as the Agent may require, whether comparable to the documents required under Section 7.12(a) of the Loan Agreement or otherwise;
SECTION 4. Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, postage prepaid and return receipt requested), telecopied or delivered by hand, Federal Express or other reputable overnight courier, to the applicable addresses specified in Section 11.3 of the Loan Agreement; or as such other address as shall be designated in accordance with Section 11.3 of the Loan Agreement. All such notices and other communications shall be effective in accordance with Section 11.3 of the Loan Agreement.
SECTION 5. General Provisions.
3
[Remainder of Page Intentionally Left Blank]
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
NEW ENTITY:
[ ]
By: Name:
Title: Address:
AGENT
FG AGENCY LENDING LLC
By: Name: Title:
EXHIBIT C
EXHIBIT D
EXHIBIT E
